I always like Sachiko Watatani’s articles, she always has practical insights other journalists seem to miss. Her quick review of Apple Pay WAON and Apple Pay nanaco is no exception. As a long time user of WAON and nanaco on Osaifu Keitai, both feature phone and Android, the additions of WAON and nanaco to the Apple Pay Japan e-Money lineup completes it enough for her to migrate to iPhone for daily use. On the face of it both cards are almost exactly alike, they work the same and have the same ¥50,000 balance limit. Wanatani san explains the differences.
Transferring a standard rainbow nanaco card and creating a new WAON in Wallet is a breeze. Creating WAON requires adding a minimum balance of ¥1,000, however one of the nice things about doing it with WAON app is you can create a ¥0 balance card, same for nanaco app.
nanaco transfer
nanaco creation
WAON transfer
WAON creation
Wallet App
Yes (standard rainbow cards)
No
Yes (Blue, GG, YuYu cards)
Yes (Blue only)
iOS Apps
No
Yes (standard rainbow card)
No
Yes (Blue and custom region cards)
WAON has the most options and no sign-up Wallet creation. A unique WAON app feature is custom region WAON cards, AEON donates part of the transaction purchase to the selected region of the card. There are 159 varieties of custom region WAON. The unique feature of nanaco app is card migration from Android to iPhone. It’s a oneway migration. Watatani san makes the same observation I did yesterday that a nice feature of nanaco card in Wallet is that is displays both balance and points saving users a trip to an outside app.
The big feature for both cards is the Apple Pay recharge backend. VISA brand is the odd man out, again, but mastercard, JCB and American Express credit/debit cards are all good. Users can also set auto-charge options using Seven Card in nanaco app and AEON cards in WAON app. Watatani san is the only review to mention the very unique feature of Apple Pay WAON: parents can setup a WAON card using the Apple Watch family setup option and recharge a child’s WAON card remotely via Messages.
After posting the update chart a reader asked a very good question: why not add the FeliCa reader logo as that is what you’ll often see on NFC readers in Japan. To which I say: ignore reader logos in Japan. Why? Because the reader physical compatibility mark that indicates the antenna location has nothing to do with what payments actually work at checkout. Apple isn’t doing anybody a favor listing the EMV logo in the Apple Pay Japan lineup. It only confuses users.
Let’s play that game again, the ‘which logo is the official NFC logo’ game. Choose:
The correct answer is #2, the NFC Forum logo. The reader physical compatibility mark for EMV is #1, FeliCa is #3. But you never see the NFC Forum logo on NFC readers, what you see is usually something like this:
The EMV mark on the reader tap area does not mean the store accepts EMV contactless…always check the payment acceptance marks.
The Panasonic reader shown above has both EMV and FeliCa logos on the tap area. The store has also attached a card that displays what payments are accepted, in this case both EMV (VISA, mastercard) and FeliCa (iD, Suica•PASMO, WAON, nanaco) are accepted. Looks good right? Not really. The EMV and FeliCa marks are the physical compatibility mark that indicate the antenna location. However, most people assume the physical compatibility mark mean the reader works for all payments…which it does not. Some stores with an EMV physical compatibility marked reader don’t support EMV, and vice versa: FeliCa is supported on the reader but not the POS checkout.
What to do? Let’s see…the NFC Forum is responsible for basic certification of all NFC devices so let’s put their logo on reader instead. Oh wait, can’t do that because people will think it’s a Nespresso machine instead of an NFC reader:
This slide says it all regarding NFC Forum efforts as an industry promotion org
Time for a new NFC logo.
It might seem like a good idea to separate NFC hardware from the payment services that run on top of the hardware. The reality is, it’s impossible to do because all-in-one NFC chips do it all. The NFC Forum could spend a ton of money creating a new NFC logo that can be used everywhere…but what’s the point? Nobody will use it even if they do.
NFC readers come in all kind of shapes and sizes for all kinds of end uses, from supermarket checkout, to transit gates, and vending machines, and much more. If nothing else remember this: the physical compatibility mark is there to indicate the antenna location and show you where to tap, that’s all it’s there for. It can be anything. It should match the service it’s intended to fulfill.
“FBI and MI5 are conducting an intensive investigation into PAX,” the source said. “A major US payment processor began asking questions about network packets originating from PAX terminals and were not given any good answers.”
The source said two major financial providers — one in the United States and one in the United Kingdom — had already begun pulling PAX terminals from their payment infrastructure, a claim that was verified by two different sources.
“My sources say that there is tech proof of the way that the terminals were used in attack ops,” the source said. “The packet sizes don’t match the payment data they should be sending, nor does it correlate with telemetry these devices might display if they were updating their software. PAX is now claiming that the investigation is racially and politically motivated.”
FBI, MI5, unnamed sources? Sounds like a spy novel. The original Jacksonville WOKV report is down to earth local news reporting with the official statement from the FBI: “The FBI Jacksonville Division, in partnership with Homeland Security Investigations, Customs and Border Protection, Department of Commerce, and Naval Criminal Investigative Services, and with the support of the Jacksonville Sheriff’s Office, is executing a court-authorized search at this location in furtherance of a federal investigation. We are not aware of any physical threat to the surrounding community related to this search. The investigation remains active and ongoing and no additional information can be confirmed at this time.”
PAX NFC terminals and POS systems support EMV, FeliCa and MIFARE protocols and are used extensively in Japan in nationwide POS systems such as FamiMart and Doutor Coffee chains. However it’s important to remember that each protocol has a hardware certification process, for EMVCo, for FeliCa Networks and for MIFARE. Card companies also have their own hardware security and certification. And even though the story sounds scary, we don’t know what ‘major financial provider’ POS systems are pulling PAX readers*, what hardware models are involved and what kind of POS software they run (provided by PAX? Developed in-house?), or what exactly the FBI are investigating.
That said, this is much more real and interesting than the silly Apple Pay EMV Express Transit VISA security scare story pushed by the BBC, mindlessly repeated by tech sites and dubious ‘security experts’ who scare people into buying their ‘services’. The so-called Apple Pay EMV Express Transit VISA exploit was just a lab experiment, this is happening in the field. The PAX story won’t get much press however because it does’t have ‘Apple Pay’ in the headline. At least not yet…I’m sure some media hack out there will come up with one, something like ‘Apple Pay sends your personal payment data to China’. Only then will people start paying attention.
*UPDATE 2021-11-03 Bloomberg reports FIS Worldpay (also based in Jacksonville next door to PAX…interesting eh?) is pulling PAX NFC readers from client systems and replacing them with Verifone and Ingenico NFC readers. FIS said, “While we have no evidence that data running through PAX POS devices has been compromised, we have been working directly with clients to replace those devices with other options at no cost to them and with as little disruption to their business as possible.” No evidence but Worldpay is replacing PAX readers anyway…based on what exactly, heresy?
PAX NFC readers comprise less than 5% of Worldpay client POS installations so we’re not talking big numbers. Meanwhile PAX has issued a long winded statement (PAX Technology announcement and resumption of trading) addressing and refuting the security risk claims from Krebs and FIS saying it’s only a geolocation feature. We don’t know which PAX reader models are involved but I suspect they are Android based. That’s the problem with all those crappy Android OS based POS+NFC all in one terminals: not only do they have lousy Android performance, they have all the Android security risks too. Dedicated hardware is way better, performance-wise and security-wise.
Let me rephrase that: Global NFC Google Pay will never happen because it depends on the device’s ability to run Osaifu Keitai apps.
To which I’ll add: because Google can’t be bothered building their own software stack in Android OS Google Pay that replaces Osaifu Keitai.
Osaifu Keitai is a smartphone only software stack that has not and can not be updated for the smart wearables era. This shortcoming is driving some interesting solutions, discussed in a recent Reddit thread lamenting that Pixel went cheap instead of deep…again.
Does the US version of the Pixel 6 Pro have FeLiCa / NFC-F? This is the #1 reason I haven’t been able to move away from iPhones… I almost pre-ordered a 6 Pro today, but this is too much of a deal for me. Does anyone know if the US model will finally be compatible with FeLiCa (sic)?
Comment: All Pixels sold in Japan since the 3 have Mobile FeLiCa NFC-F. However, Google Pay makes limited use of it. Unlike Apple Pay, Google’s implementation is limited to just a few apps in Japan. They are going to need to do a top-to-bottom overhaul of Google Pay to make this available worldwide. Not this year. But maybe as they integrate Fitbit and produce a watch, that might be the kick they need to make it work.
Reddit
Mobile FeliCa is installed and runs on Pixel models worldwide, however Pixel blocks the Osaifu Keitai stack from running except for Japanese models. Despite this stalemate on the Android side, we’ve seen a number of smart wearables with Mobile Suica released over the past year from Garmin and Fitbit. We’re also seeing signs that Suica support is coming to Wear OS. From a reader:
Suica appears to finally be coming to Google Pay for Wear OS. There’s strings like “FeatureRolloutsModule_ProvideSuicaSupportedonWearValueFactory,” “WearSuicaCard,” and “WearSuicaProvisioning” in the newest APK.
Wear OS, Garmin and Fitbit do without Osaifu Keitai by using Mobile Suica Lite which runs on Mobile FeliCa Cloud. This is fine for wearables but it does leave a service gap, Osaifu Keitai devices gets the full array of FeliCa services but wearables get a subset. This begs the question, what is the future of Osaifu Keitai when it’s limited to smartphones? Apple does without it which is why both iPhone and Apple Watch seamlessly deliver the same full set of Wallet services.
Only when Google does a top to bottom overhaul of Google Pay that replaces its current dependence on Osaifu Keitai can Global NFC Google Pay ever happen and allow Google to deliver a Pixel family of devices from smartphone to wearables, that truly rival Apple, feature for feature. We need that.
Google’s previous effort, the ill-fated Android Pay HCE NFC-F, along with cheap over deep premium Pixel devices, doesn’t instill confidence that Google cares about getting it right.
Suica was the centerpiece of the Apple Pay launch in Japan October 25, 2016
October is Apple Pay month in Japan. Today, October 21, we have the Apple Pay WAON and nanaco launch. October 2020 saw the Apple Pay PASMO launch ceremony attended by Apple VIPS. October 2016 was the biggest launch of all. This month marks the 5th anniversary of Apple Pay in Japan that launched with the FeliCa enabled iPhone 7 and the iOS 10.1 update. The initial rush to add Suica to Wallet was so great that it brought down both Apple Pay and Mobile Suica servers for several hours. Junya Suzuki, the best journalist in Japan covering digital wallet payments and technology, predicted that Apple Pay would be the ‘Black Ships‘ inflection point catalyst in Japan that would change everything. He was right. Everything has changed.
I tried to think of something smart and elegant or throw together some market data numbers that explain the transformation Apple Pay facilitated in Japan, but it comes down to this picture, a crazy kaleidoscope of contactless payment choices at the local post office. That’s as mainstream as one can get.
Payment options at the Japanese post office
The post office payments menu doesn’t have an Apple Pay logo but EMV brand cards at the top are Apple Pay, FeliCa cards in the middle are Apple Pay, shitty pain-in-the-neck-launch-an-app code payments at the bottom are not Apple Pay…and yes, you can still pay with cash if you need to. This crazy variety, by western standards, is the reason why Japanese Wallet users are excited about the new 16 card iOS 15 Wallet limit, they want to add more cards and 12 was not nearly enough. We have Apple Pay to thank for this overflow of payment options. Even though Apple Pay logo isn’t anywhere to be seen, Apple Pay is reason why so many contactless payment choices exist and why they are mainstream. This is the Apple Pay Japan transformation.
A timeline of changes and challenges
2016: Apple Pay Suica and Express Transit debut
October 2016: Apple Pay launches in Japan with support for Suica (compatible with the Transit IC transit and payment network), iD and QUICPay payment networks (American Express, JCB, Mastercard, VISA).
2017: Global NFC iPhone, anybody from anywhere can add and use Apple Pay Suica, and new Apple Japanese font branding
September 2017: Global NFC on iPhone 8, iPhone X, Apple Watch 3 supports dual mode cards and seamless EMV and FeliCa NFC switching. Japanese users can make payments internationally with their Japanese issue cards on EMV payment terminals, and FeliCa payment terminals at home. Mobile PASMO trademark registered.
2018: Lose your wallet and go mobile
2018: Carrier code payments services launch as cashless momentum grows, iOS 12 Wallet adds MIFARE support for Student ID, May: NTT docomo dBarai, October: SoftBank PayPay.
2019: Cashless Consumption Tax Rebate Program
2019: Japanese Government Cashless Consumption Tax Rebate Program
October 1, 2019 through June 30, 2020. The aim of the program is to encourage cashless purchases and increase cashless use up to 25% of all purchases by 2025. To do this the program offers up to 5% tax rebates for cashless purchases made at middle~small businesses and also offers merchant subsidies for installing cashless checkout systems. This is a prescient inflection point as COVID proves to be huge catalyst for going cashless, far more than a normal Tokyo Olympics would even have been.
2021: Apple Pay WAON and Apple Pay nanaco eMoney cards launch, VISA Japan adds Apple Pay in-app purchase support and NFC dual mode switching. This completes the Apple Pay lineup. The Tokyo Olympics didn’t turn out to the big crowd contactless driver the industry expected. Nevertheless market surveys indicate that cashless payment use in Japan has already passed the 25% target.
Japan was a very unique case, the most unique but don’t make the mistake of dismissing it as an outliner. It was way ahead of the curve with important lessons beyond the tired old meaningless FeliCa vs EMV winner-loser debate. Japan already had the extensive and mature Osaifu Keitai mobile wallet platform that launched in 2004, built on the Sony and NTT docomo created Mobile FeliCa standard, long before EMV grafted NFC on their chip and issued contactless credit cards.
The Apple Pay that launched in 2014 was exclusively EMV as credit cards were the best start point, but Apple was already hard at work adding FeliCa, MIFARE and other NFC based transaction protocols as standard in the secure element hosted on Apple Silicon. The result was first seen in 2016 iPhone 7 and Apple Watch 2 in Japan, with Apple Pay Suica, Express Transit and direct Wallet transit card adding as the centerpiece launch strategy, all firsts.
This was an extremely shrewd move. The Japanese public was well versed using Suica for transit and quick purchases. The impact of choosing the Tokyo area based Suica as the start point, coupled with the convenience of anywhere, anytime Apple Pay recharge, supercharged Suica and Apple Pay. They both grew quickly.
The full Apple Pay vision came into focus with the 2017 release of iPhone 8, iPhone X and Apple Watch 3, these were the first global NFC devices that worked everywhere. This was a complete break with the Android model of only selling FeliCa capable devices in Japan or Hong Kong. This is why any iPhone from anywhere can add and use a Suica transit card and Android devices cannot.
Only 27% of iPhone users who can use Apple Pay use it
50% don’t use Apple Pay but are interested in using it
22% don’t use Apple Pay and don’t care about using it
The middle 50 is the most interesting aspect, there has certainly been migration to the Apple Pay use bracket since COVID hit. Other interesting data points: 34.4% use Apple Pay daily, 24.9% use Apple Pay every 2~3 days, 37% use it for public transportation, 69% use it for convenience store purchases. This last one is the classic Apple Pay Suica (and now also PASMO) sweet spot: quick small on the go purchases without Face • Touch ID, courtesy of Express Mode. With COVID and Face ID with face masks, that sweet spot is sweeter than ever.
The secret of success and important lesson That is all well and good, but how did Apple Pay spearhead this market change? Apple Pay proved to be a great neutral platform for payment players to both play on and play off from. But that’s not all, there is a vital point that most people miss. The secret of Apple Pay Japan’s success was that it shifted the user focus and experience away from the Osaifu Keitai app model where different NFC services are scattered across many different apps, to a simple ‘just add the card’ in Wallet where everything ‘just works’ without apps. Complexity vs simplicity; it was this simplicity that ultimately won out because most users don’t want to deal with setting different services in a bunch of apps. It was this simplicity of the Apple Pay user experience, combined with Global NFC Apple Pay as standard across the board on all devices and price points, that drove the Japanese payments transformation that Osaifu Keitai could not with its complexity and exclusivity that pigeonholed it as a high end option instead of a standard feature.
This is the lesson of Apple Pay in Japan that other markets would do well to study. Lots of different apps offering NFC services doesn’t drive user uptake, centralized simplicity with an easy to use UI drives user interest and use, ‘it just works’ standardization. It is this centralized simplicity that is driving user interest in iOS 15.1 Vaccination Certificate Wallet support and driver’s license ID. The EU and Australia are determined to force Apple to make iPhone NFC ‘open‘ and move everything to the app centric model. If their intention is to drive user uptake, the Japanese market experience proves otherwise. Good luck with that. To most westerners the value of the Japanese mobile payments experience will remain utterly lost, like that old Psychedelic Furs song whine line, “You didn’t leave me anything that I could understand.”
The Crowd Cast cashless map illustrates the rich variety of Japanese payment platforms, some code payments players like ORIGAMI no longer exist
Looking ahead Where does Apple Pay Japan go from here? Rakuten Edy, the very last holdout, will certainly join the lineup soon enough. iOS 15 Wallet has shifted the focus from payments to keys and ID. Expect to see to some digital key action later this year. On the ID side the Japanese Ministry of Internal Affairs and Communications (MIC) has said they are in discussions with Apple to bring the digital My Number (Japanese Individual Number) Card to Wallet, hopefully soon after it launches on Osaifu Keitai in March~April 2022.
The value of having a digital My Number ID in Wallet is that regions want to promote special services and discounts tied to a resident address. That way local governments can promote differently tailored discounts and campaigns for locals and visitors. JR East for example, is planning to use My Number Card for MaaS transit discounts that promote regional economies. When a payment is made with Suica, the appropriate discount kicks in with the My Number Card verification. The My Number Card + digital payments concept is similar to the 2019~2020 Japanese Government Cashless Consumption Tax Rebate Program. The promise of getting local area based discounts for using transit or buying stuff with Apple Pay is one of the most practical use case scenarios for digital My Number Card that I can think of.
Farther out we might see development of ‘Touchless’ transit gates that incorporate Ultra Wideband technology which is already being used in iOS 15 Wallet for Touchless car keys. It would be cool to simply walk through the gate iPhone in pocket, with Suica taking care of business. I was recently reminded that UWB enhanced gates would greatly benefit those with disabilities. I saw young man in an electric wheelchair going through a JR East station manned gate, the station attendant was holding the reader out for him to tap but his movement was limited. It was difficult for him to hold his iPhone to the Suica reader. A UWB gate would let him zip through unattended at any touchless gate, that’s what barrier free should be about. When you think about it, QR Code apps for transit are just cruel for handicapped users.
Next generation JR East transit gates are wheelchair friendly but UWB touchless gates are the best ‘barrier free’ solution for users with limited mobility.
Apple Watch on the left wrist + New JR East gate = business as usual.
Heck, I would say it’s even easier to use as you don’t need to lift your wrist up high. pic.twitter.com/fb1cKa5X8E
On that note…despite all the hand wringing over the rise of code payment apps, even as Apple is flirting about adding code payments to Apple Pay, Japan will continue to be a fascinating place to observe contactless payment trends before they appear in other markets. And even though Apple Pay Japan has lost the cool factor that peaked in 2018 and become mundane, that’s okay. Apple Pay in Japan will continue to be the payment service where you can do things that you cannot do with Apple Pay in any other market. That sounds like fun to me and I look forward to the next 5 years of Apple Pay Japan and hope to write about digital wallet developments…occasionally. Since COVID hit blog traffic has collapsed to the point where I think it might be time to change gears. We shall see.
Until next time stay safe and have a good cashless…er you know what I mean.
Apple Pay Japan Comments Some reader and net comments about using Apple Pay Japan through the years. Tweet or email if you have any experiences you’d like to share and I’ll add them here.
Apple Pay Suica is so convenient it made me wear my watch on my right wrist
The last 2 times I was in Japan, I used Apple Pay with Suica. It is miles ahead of what we have in Singapore, in terms of speed, feel, and experience. And best of all, no app download required!
I changed from Android back to iOS in 2017 mostly due to being able to use Mobile Suica…And this is the real reason I still have to educate people coming to Japan about mobile Suica and putting a debit card into ApplePay and never need an ATM for most things here…Also stop with “Japan is a cash driven society” tropes. I go for weeks not using bills and coins here.
Comment regarding code payment apps vs NFC: Imo Apple and Google Pay are all a payment system needs: it’s quick, easy, and doesn’t require looking like a clown trying to scan a code…Imagine having to scan a code to pay for Suica, it would be a nightmare.
I have no idea why Apple Pay isn’t more widely supported over here. I usually just try and use Suica on my Apple Watch for most things.
The true value (of Apple Watch) is in Apple Pay and Express Transit card. If your city support it especially the latter, it’s a tremendous value.
Truth to be told, I’ve been a user of Japan’s Apple Pay almost since it came out, even thought I don’t live there haha. As a Software Engineer I always was amazed how Japan had a contactless system that you can use seamlessly on transport or store purchases.
It might sound trite, but I am still happy and amazed every time I use Suica on my iPhone. It has been a long road from Edy and Mobile Suica to this point. The next thing for me would be export of my spending for tracking. Not through Suica, but from iOS. And I really wish more Japanese businesses used the Apple Wallet for (reward) cards. When it first debuted I imagined finally getting rid of all my store cards, but it never happened.
When I was in Japan in November, when I looked up my destination via Apple Maps, I got seamless linked to buy a SUICA for my Apple Wallet direct from my credit card. It was pretty slick – 10 second transaction and I had a SUICA in my Apple Wallet.
The best way to use Suica Card on Android devices is to simply buy a new iPhone…
Suica on Watch is just superb. Even better when worn on right hand.
Two great things about my iPhone XS when traveling in #japan: first, SUICA public transport card in Apple wallet and you are able to charge them via Apple Pay wherever you are and second the dual SIM feature to get a traveller SIM like #Ubigi into your phone easily.
Twitter question: Japan peeps, what are your fave “cashless” payment apps? What do you consider the most convenient/useful?
Twitter answer: Suica wallet. Everything else is fucking shit
I want more reward point card support in Wallet that’s easier to use than it is now and supports movie tickets too.
One more for the road: Ken Bolido’s wonderfully informative Apple Pay Japan intro video from 2019
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