VISA Japan and Apple still at odds over VISA Touch debit cards

The April 19 launch of SBI Neobank Mastercard debit card support for Apple Pay was a bit unique: the first time that a plastic issue Japanese debit card came to Apple Pay and the first Apple Pay Japan debit card supporting the FeliCa iD payment network. Another interesting aspect is that only the Mastercard version supports Apple Pay, the VISA version is plastic only with VISA Touch (EMV contactless) support.

There are plenty of bank app issue digital only debit cards from JCB, Mizuho, MUFG and others on Apple Pay. These all work on JCB’s QUICPay (FeliCa) and J/Speedy(EMV) payment networks. Apple Pay Japan supports many different mobile payment network cards thanks to Mobile FeliCa support, by far the largest selection of Apple Pay payment networks in the world: EMV (VISA, Mastercard, AMEX, JCB), iD, QUICPay, Suica, PASMO, nanaco, WAON. But VISA issue debit cards are not supported even though there are many, not a single one on Apple Pay.

Wasn’t this taken care of by the May 2021 Apple and VISA JP agreement? For credit cards yes, one year later they are still at odds over FeliCa support in debit cards. VISA Japan brand debit cards are VISA Touch EMV contactless exclusive, single mode cards. VISA JP credit cards are dual mode EMV/FeliCa for plastic and smartphones, but not debit cards. We don’t know the reason but debit cards deifintely fit the budget customer category while credit cards come with credit checks, perks and card membership fees for upscale cards.

As an easily available budget card, VISA cuts costs by dumping the dual mode EMV/FeliCa IC chip and transaction fees for the convenience of using FeliCa iD/QUICPay payment networks. In other words VISA keeps all transaction fees for themselves while marketing the shit out of VISA Touch as the greatest thing since…whenever.

All of the other card brands in Japan have dual mode NFC as standard. Not VISA, they’re playing the long game of eliminating FeliCa payment network competition. This stupid polarizing single flavor NFC position only served to give QR Code payment networks (PayPay, Line Pay, etc.) a huge opportunity that they smartly played. End result: more payment network competition than ever before.

Apple on the other hand has a very simple rule for all Apple Pay Japanese issue cards: they must support FeliCa and all EMV cards are global NFC dual mode. Was this the price for adding FeliCa support to Apple Pay? Perhaps, I think it’s more to do with the Apple Pay vision of removing complex and confusing hardware choices, the Google Pay Japan mess, for standard ‘just works everywhere’ NFC. Has this been successful? Very...just ask Suica.

2022 Japan mobile payments survey results: Mobile Suica tops the bunch

The Japanese contactless payments landscape has changed considerably since the 2016 launch of Apple Pay. It certainly was the Black Ship arrival turning point that Junya Suzuki predicted, contactless payments, especially mobile contactless payments, continue to evolve in fascinating ways.

The latest Mobile Marketing Data Labo (MMD) mobile payments survey ranking for NFC payments had an interesting twist: Mobile Suica was the top NFC payment choice at 22% beating out NTT docomo iD at 21%.

That doesn’t sound like much but this survey is asking specifically about store purchases made with a mobile device, not transit use. Mobile Suica beat iD despite a number of heavy marketed iD related dPoint rebates and bonus point campaigns. What’s even more interesting is that users said they are really interesting using Rakuten Edy, with Mobile Suica running a close 2nd place, and iD way down in 6th place. Why? 2 reasons I think, the convenience of Express Mode for purchasing things on the run keeping face mask in place, and points. Don’t underestimate the last one.

Tossing the local teiki for Mobile Suica
The survey got some notice in the Japanese tech media but nobody analyzed the surprising strength of Mobile Suica despite the ongoing COVID impact on Suica transit use, perhaps it didn’t make sense to them. Mobile Suica topping the ranking doesn’t make sense by itself as suddenly gaining users in the traditional greater Tokyo Suica transit use region…but it does make sense when you add people who don’t need a local region teiki/commuter card for work because of COVID and have switched to Mobile Suica for their occasional transit needs, also using it for purchases. Instead of a plastic ICOCA, Sugoca, manaca, TOICA, etc, those users use Mobile Suica. Not everybody is switching of course, but it does put Mobile Suica use on a larger national footing than ever before, and that adds up. This, I believe, is what the MMD survey ranking is showing.

And there is JRE POINT. JRE POINT only got started when Apple Pay Japan did in 2016, but it didn’t become a serious thing until Suica Point Club was merged into JRE POINT in 2017. It has steadily grown from there and the last missing puzzle piece was added when Eki-Net Point was finally merged into JRE POINT in June 2021. JRE POINT has finally achieved synergy gluing together the far flung JR East online service pieces (Mobile Suica, JRE POINT, Eki-Net) and JR East will be aggressively marketing point campaigns and eTicket discounts that encourage users to go all in with mobile.

The survey also shows at something else: dPoint isn’t very compelling despite all the campaign rebate noise. I’ve heard from iD•dBarai (dPay Code Payments) users, ‘dPoint doesn’t travel well’, the NTT docomo dPoint economic zone lock-in isn’t very compelling from the inside. This is confirmed by MMD’s code payment app satisfaction survey that ranks dBarai at 4th place, far below Rakuten Pay at #1 and PayPay at #2. From my own experience I use dPoint when upgrading to a new iPhone and nothing else. The SoftBank economic zone (Z Holdings et all) was clever in that they made ubiquitous availability and cash rebates, instead of points, the service lock-in.

And then there is Rakuten POINT economic zone. The survey interest ranking is measuring Rakuten POINT interest not Rakuten Edy. The ability to earn and use Rakuten POINT across online shopping, stock trading, travel reservations and more is big. The gist of it all is that Japanese users care more about points than the contactless payment type. Long term I think the most successful payment economic zone players will follow the Toyota Wallet model, a wallet app offering flexible multiple payment options (QR, NFC, etc.). Apple and Rakuten need to hurry up with Apple Pay Edy, the very last eMoney holdout.

UPDATE
Forgot to include the corporate travel angle driving Mobile Suica use.

SMBC pulls a Toyota Wallet move with V POINT app and Apple Pay prepaid card

With more and more payment players and their dogs doing the wallet app + instant issue prepaid card thing, it was only a matter of time before banks got into the act. SMBC announced and released the V POINT app today. Think of it as a re-branded Toyota Wallet app without the QR Code bit and multi payment network strategy: you download the app, create an account and a prepaid Apple Pay (iD) or Google Pay (VISA) card that can be recharged from a bank account or a credit card or with points. And because VISA Japan has yet to sign a deal with Apple, Apple Pay users get a FeliCa iD prepaid card while Google Pay users get a EMV contactless VISA prepaid card, no dual protocol for anyone.

The big sales point is…yes another reward point system, V POINT, and it comes with a dumb looking mascot too, a SMBC corporate green ‘beaver’ which rhymes with ‘VISA’ in Japanese…sorta. Every ¥200 card purchase earns one V POINT. Points can be used for a card recharge, just like Suica, or for purchases at participating V POINT stores and online shopping. How well this goes down with card issuers under the SMBC umbrella like Docomo d Card and their expanding D Point empire, is anybody’s guess. I suspect this move will rock that relationship (to the breaking point?) and some others as well.

During the V POINT online press event SMBC also announced that new SMBC issue plastic cards will no longer display a card number for VISA and Mastercard.

VISA Japan finally signs on with Apple Pay (Updated)

UPDATE 5/11/21
Visa JP finally officially joined Apple Pay

Japanese credit card otaku tweeted late last night that the Apple Pay Wallet animation started displaying VISA, which it never did until now. Sure enough, VISA displays in the add card animation for the Apple Pay Japan region on iPhone, Apple Watch and iPad. Wallet only displays supported card brands for the selected Apple Pay region so the change indicates VISA JP is officially on board.

The trouble is we don’t know what that means without a press release from VISA Japan, Apple, or Japanese card issuers. So far we don’t have one. All we have are 2 questions that will hopefully be answered later today or the next few days.

Does it mean current iD/QUICPay VISA cards in Wallet fully support Apple Pay features?
A quick check adding a digital Kyash VISA prepaid card to my Wallet did not show anything new, just the same limitations: no VISA logo, no In App (Suica recharge) or web purchase support, no EMV/FeliCa dual mode. That doesn’t mean anything by itself: virtual Kyash VISA still has the limitations but it may be different for major VISA issuers like SMBC and MUFJ.

Does it mean that Apple Pay is simply matching the EMV only VISA Touch cards already on Google Pay from Sony Bank and others?
This seems more likely but also flies in the face of Apple Pay Japan encouraging ‘it just works anywhere’ dual mode EMV/FeliCa support for Wallet issue. If we don’t get announcements from VISA Japan or Apple, it could be a slow dribble of VISA Touch announcements from VISA JP card issuers, not much fun.

What I really want to know is: did VISA Japan blink, or Apple?

VISA Touch issuers currently on Google Pay

UPDATE 11/24
Somebody in Cupertino uploaded a new JSON payload to Apple Pay servers too soon. After showing in Wallet for almost 24 hours, VISA disappeared from the add card animation lineup around 6 pm JST. With a gaff this long at least we know VISA support is coming to Apple Pay Japan soon and likely with the Line Pay Apple Pay card announced in September for launch ‘later this year’.

The Ides of October

Yesterday, October 1, was the 15th day of the month by the lunar calendar. October is always a rush season of product announcements but the news cycle this year has been…well crazy doesn’t even begin to describe it. Part of the problem is COVID driven online announcement events. These were new and sorta cool 3 months ago but have degraded into slapdash scheduled info dumps.

It’s been especially brutal in Japan this week with the Docomo Account/Yucho Bank security crisis and NTT Docomo buyout stories soaking up all the media attention. On the ides of October we had Pixel 5, Wena 3 smartwatch, Apple Pay PASMO announcements, and the Tokyo Stock Exchange outage. Japanese IT journalists holed up at home or tiny APA HOTEL rooms are overwhelmed trying to keep up.

The Wena 3 announcement got a little lost in the shuffle but had some interesting e-payment developments: Suica, iD and QUICPay joined Rakuten Edy which has been on Wena for some time. It’s weird that Sony has taken this long to add, more or less, full FeliCa support in their home market.

Most of the online buzz was centered on Wena 3 Suica support which follows the Garmin Pay Suica launch in May. Wena 3 Suica shares the same Google Pay recharge backend that Garmin does, I suspect Wena 3 and Garmin both use Mobile FeliCa Cloud. The same Garmin restrictions also apply: no plastic card transfers, no Suica commuter passes, no auto-charge, no Green Seat upgrades.

That said I think many users will enjoy using Suica, iD and QUICPay wrapped in the strikingly designed Wena 3 lineup. My only regret is I don’t have one to tryout.