The Future of Cashless Payments is Now

Some people look at Japan and see a crazy mess of cashless payment options: credit cards, iD, QUICPay, Suica, QR Code players like PayPay and Line Pay, all vying for customer wallet space. ‘It’s a shame,’ they say, ‘In our country we have it all worked out with EMV contactless bank cards that do everything.’

I’ve got news for those people, the mess they are seeing in Japan is the future, it just hasn’t come to their country yet. It’s the revolution of payments on smartphones that started with digital wallets like Apple Pay, Google Pay, etc. but it’s sure not ending there, the number of payment options is only going to grow. Get used to it.

The one size fits all thinking of the plastic card era is dead. Some people think it still lives on in digital wallets, but it’s dead. The future belongs to nimble players who mix and match the best payment technologies for the job at hand and offer customers better services along with it.

The so called ‘FeliCa failure’ curse is actually a kind of blessing: the market payment technology fragmentation gave new players a footing to try different payment methods. Diversity isn’t a weakness, it’s a strength. The diversity of Japanese cashless payment options is the result of its longer history of mobile payments.

That is what smart devices, digital wallets and payment apps do: they erode the old ways and bring fragmentation along with new opportunities. There will be cycles of expansion and consolidation but one size fits all will never come back. Call it cutting edge or call it stupid, like it or not, the cashless mess is coming your way.

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The JAPAN CASHLESS Rebate Week 1: MiniStop Reports 6% Cashless Payment Use Increase in First Week

This is what we were waiting for. After all that hassle of getting ready for the CASHLESS rebate program, how many people were actually going to go cashless to get the rebates? NHK reports that the MiniStop convenience store chain saw a 6% rise in cashless payments use rates in the first week of the rebate program, rising from 24% to 30%. MiniStop president Akihiro Fujimoto said he was surprised at the quick uptake. I’m not.

30% was the informal Apple Pay Suica use rate I found in station areas in 2017. The MiniStop number is just one data point from one store chain, so it will be interesting to see how cashless use rate averages pan out over time. Convenience stores chains offer 2% rebates with cashless purchases, calculated and deducted from the customer bill at checkout. Smaller store 2%~5% rebates are post-transaction refunds. Despite the small data sample size, I think we are already seeing the beginnings of a tipping point here.

JRE POINT Issues Apple Pay Suica Notice

With the JAPAN CASHLESS Rebate program in full swing, many Apple Pay Suica users are suddenly paying attention and signing up to get those post-transaction rebate points. The sleepy JRE POINT site is suddenly a hot bed, and users are advised to steer clear of registering Suica cards during the peak evening hours of 22:00~24:00.

JRE POINT issued a notice today reminding users with plastic Suica cards registered with JRE POINT, that they need to re-register the Suica as Mobile Suica if they transfer it to Apple Pay.

JRE POINT allows multiple Suica cards to be registered, but only a single Mobile Suica card (green) can be registered at any one time, and one Mizuho Suica (blue). Once a Apple Pay Suica/Mobile Suica card is registered however, users don’t need to worry about the Suica ID number changing when migrating to a new device or moving Suica from iPhone to Apple Watch. The number usually doesn’t change but even if it does, the Mobile Suica/JRE POINT system takes care of it.

UPDATE: I forgot to mention that MIZUHO Suica does not count towards the Mobile Suica limit, you can have one Mobile Suica card (green) and one MIZUHO Suica card (blue) both in Wallet, both earning JRE POINT.

The JAPAN CASHLESS Rebate Day 6: Rebate Mana

2% and 5% CASHLESS rebates are processed and paid out at the end of each month. So I was a little surprised last night when I opened JRE POINT app, checked the transaction list and found lots of extra points listed as ‘rebate campaign’.

It took me a moment to realize that these were not JAPAN CASHLESS store rebate points but JRE POINT campaign rebate points. JRE POINT is running several point campaigns, the 2% one runs until June 30, while the NewDays Self Checkout one runs until October 30. If you are registered with JRE POINT, use Apple Pay Suica to buy your daily commute drinks at NewDays self checkout this month and rack up the points: the regular 2% + the 3% self checkout. Every other point system is doing the same from PayPay to Rakuten so keep an eye out for all kinds of campaigns.

The JAPAN CASHLESS Rebate Inflection Point

On the eve of the CASHLESS Rebate program launch I wrote:

Regardless of whether the CASHLESS rebate is ‘a success’ or not, it will be a tipping point. Already I notice a shift in public perception: if a store is cash only, it definitely looks behind the times in the minds of customers. I think that’s the whole point.

Consumption tax, Cashless rebates and Coffee shops

It really doesn’t matter if the CASHLESS Rebate program is a success or a dud. It’s an inflection point tick mark in the mind of Japanese society, the ship of Japan is making a tiny course correction that will veer the vessel off in a very different direction over time. We already have the big changes that the Apple Pay Suica ‘black ship’ brought to Japan since 2016, and that was just the start.

Junya Suzuki, Japan’s top journalist for all thing cashless, posted a new article: The Real Reason for the Cashless Rebate Program. Suzuki san makes the same argument: the Cashless Rebate Program is an inflection point, but with much more detail and depth. It’s a great read and worth a look even just for the pictures and captions.