Tokyo Cashless 2020: NFC Pay…are we there yet?

Tokyo Cashless 2020 is a periodic look at all things cashless as Japan gears up for the Tokyo Olympics event. If there is a topic you’d like covered, tweet @Kanjo

Mom always had a ready answer for us kids at the start of every family summer trip, “No honey we’re not there yet.” It was vague, non-committal, endlessly cheery. NFC Pay (aka EMV contactless) has made some progress at Japanese checkouts, but as Junya Suzuki lamented recently it’s still not universal. Cashless payments in general however have made good progress thanks to the Japan Cashless rebate program.

Every inbound cashless Japan experience is different, it depends on the kind of trip, the region and personal spending habits. A businessman using plastic credit cards staying in Tokyo area hotels and well known areas, then yes the experience is mostly cashless. A budget backpacker on Lonely Planet/Airbnb trail will have a very different, very cash cash experience. Europeans and Australians will find that their EMV contactless bank cards don’t tap very far and wide.

Just Say ‘Apple Pay’ Conundrum
People would love to be able to just say ‘Apple Pay’ at checkout, but this does’t work very well in Japanese contactless checkout jungle. When you say ‘Apple Pay’ you get:

  • The main card set for Apple Pay Wallet
  • Face ID/Touch ID authentication request

This can play out in different ways. If you have an international issue bank card set as the main card and say ‘Apple Pay’ at Lawson, the reader pulls up the main card with a Face ID/Touch ID authentication request. If you have Suica set as the main card and say ‘Apple Pay’ at Lawson, it pulls up Suica with a Face ID/Touch ID authentication. If you want use Apple Pay Suica Express Transit at checkout, you have to ‘Suica’, not ‘Apple Pay’. Are you confused? The confusion is compounded by poor employee training. You can use EMV contactless at any McDonalds but getting the checkout staff to actually make it happen is a completely different story.

Who’s to blame for this state of affairs? I say everybody: Banks, Card companies, The EMV Consortium, Sony, NXP, The NFC Forum, Apple, Google, Samsung, and especially Visa Japan who refuse to play nice with anybody who plays nice with FeliCa. Instead of working together to create and market a few intelligent payment schemes that work seamlessly, we have a world of this and that pay. The only player to gain anything from the Japanese market card payment mess is, surprise, the card-less QR Code PayPay.

EMV contactless and known aliases
To successfully navigate the Japanese contactless jungle, inbound Apple Pay travelers needs to be acquainted with a few checkout slogans: NFC Pay, credit and Suica. When you see the EMV contactless acceptance logos for Mastercard, Visa, Amex or JCB, say ‘credit’ or ‘NFC Pay’ at checkout. This should work for both plastic EMV contactless cards and Apple Pay/Google Pay/Samsung Pay inbound digital cards. Even if the checkout terminal does not display an Apple Pay or Google Pay logo, you are good to go.

Unfortunately, there isn’t comprehensive resource for NFC Pay store listings. Visa Japan only lists Visa Touch stores, Mastercard only lists Mastercard contactless stores, etc. The best approach for iPhone/Apple Watch inbound visitors is to create a Suica card on your device and be flexible, use a mix of Apple Pay Suica (recharged with Apple Pay cards), NFC Pay and plastic credit cards. NFC Pay nirvana may not be here yet, but we’ll get there…eventually.

Open loop wishful thinking trashes Apple Pay Express Transit reputation

The latest OMNY bump in the road perfectly captures the downside of making contactless credit/debit cards a one size fits all solution. As the New York Post piece (via MacRumors) points out, some Apple Pay Express Transit users are being double charged for fares. Perhaps they didn’t know that Express Transit was enabled in the first place, perhaps the iPhone passed too close to the OMNY transit gate reader. It’s a classic “you’re holding it wrong” situation that has nothing to do with Apple Pay Express Transit and everything to do with the current EMV architecture and how banks implement it.

Part of the problem is that OMNY is new, it’s not working across the entire MTA system yet, and open loop EMV bank cards will never replace all classic MetroCard fare options. That job is for the MIFARE based OMNY transit card due in late 2021. Until the system is complete Metro users will have to juggle different cards and deal with a very long transition. Transport for London (TfL) users have had MIFARE based Oyster cards since 2003, contactless credit/debit cards have been ubiquitous since the 2012 London Olympics when open loop was added to the TfL Oyster fare system.

To Biometric or not Biometric?
Open Loop credit/debit cards on transit gates instead of native transit cards always come with banking and credit industry baggage. Even in the contactless card heaven that is said to be London, there are a surprisingly number of gotchas: minimum limits for using cards, max limits that require PIN codes. It’s an endless loop of banks pushing one way and merchants pushing back.

The golden uptake for Apple Pay in Japan was Suica and is the same story everywhere: it’s all about getting rid of coins for transit, coffee, sandwiches, etc. The small stuff. This is the 20,000 JPY prepaid heavenly region where Apple Pay Suica sings and banks so desperately want to shut out all other players and keep all the marbles. But bank cards have an authorization problem: banks set spending limits not the card architecture. The line is always changing, what works today might not work tomorrow. The prepaid Suica architecture itself is the firewall that does away with user authorization because local processing transaction at the transit gate or store reader is all the authorization necessary.

Express Transit was developed for Apple Pay Suica in 2016, it remains the best matchup because the feature is a basic part of the Suica card architecture that is not a bank card. Apple Pay Express Transit for EMV payment cards that appeared with iOS 12.3 is a retrofit job that I predicted would have problems because retrofits are about dealing with baggage, not creating a better long term solution. 7 months later we are already there. This problem isn’t going away, not as long as banks and EMV keep operating the way that they do.

Suica joins Coke ON IC, is it worth it?

Coke ON is one more point gimmick app that offers a free beverage for points, bottle top ‘stamps’, earned with purchases via FeliCa/Coke ON IC (Transit IC, Rakuten, nanaco, PiTaPa, WAON), credit cards and QR (LinePay, PayPay aka Line PayPayPay) linked via Coke ON. Up until now Suica was excluded from earning stamps but will join the other Coke ON IC cards starting January 14.

The Coke ON app is not particularly user friendly. It wants your data, your location and your Bluetooth to connect to Bluetooth enabled Coke vending machines. And it seems overly aggressive, at least according to a very long Twitter thread. I’m not sure what exactly the issue is for the user but it seems related to location services and suspect card reads.

Japanese users have complained about Apple Pay Suica location based transaction notification details since the default feature appeared with the iOS 12.2 Suica make over. I have no problems using Apple Pay Suica on iPhone 11 Pro to buy drinks without Coke ON. The problem described in the tweet thread could be a Coke ON incompatibility with Mobile Suica despite Suica compatibility listed on the vending machine side. Hopefully this is fixed for the Coke ON Suica debut, however I don’t plan on giving away my iPhone data to collect Coke ON app bottle top stamps.

Coming later this year attractions that didn’t make it, and one that did

Now that Apple is in full holiday season vacation mode, here is one last look at some promised ‘coming later this year’ services that didn’t make it (and a last minute one that did).

Apple Maps 2.0 USA
The highly detailed Apple Maps 2.0 remake was first announced in mid 2018 with a rollout to be in place for the United States by the end of 2019. The West Coast and Upper East Coast made the cut but half of Mississippi, the rest of the Southeast and most of the Central US are still missing (look for the green). This is not a good sign that Apple can deliver on their promise of providing better map services in Japan before the Tokyo Olympics.

UPDATE: A few hours after posting, MacRumours reports Apple Maps 2.0 data rolling out to all Southeast and Central areas following reports from Justin O’Beirne of beta testing earlier this month. I do not see updated map details from Japan yet but it will take time to show up on devices worldwide. Apple cut it close but kudos for keeping their 2019 delivery promise with 4 days to spare.

Apple Pay Ventra
The native Chicago Ventra transit card on Apple Pay is a big deal that was announced back in March. It represents the first major native transit card for the USA on Apple Pay. The much smaller Portland transit system HOP card landed safely in Wallet in May, but Ventra is still listed as ‘coming soon.’ The fault is not with Apple but with Cubic Transportation Systems who operate transit fare systems for Ventra, New York OMNY, Transport for London (TfL) Oyster, Sydney Opal, Washington DC Metro, and many more. For all of their supposed system expertise, Cubic was extremely slow rolling out Apple Pay Express Transit on TfL and has yet to deliver a single native transit card on Apple Pay or Google Pay. I hope Cubic does a better job in 2020.

Apple Pay Octopus
The Apple Pay Octopus ‘now you see it, now you don’t’ saga of 2019 was strange and ultimately sad. The Apple support side was all ready to roll with iOS 13. Octopus Cards Limited announced Apple Pay support back in July with ‘coming soon’ website artwork that was pulled when the launch was officially delayed on December 19. My take is that OCL parent Hong Kong MTR made, or was forced into, a political decision to limit services, starting with the unexplained service outage of Smart Octopus during the Hong Kong Polytechnic University siege. This is not a popular opinion.

Readers have reported riot damage to MTR infrastructure and suggest this might be a reason for the Apple Pay Octopus delay. I don’t buy it. Hong Kong MTR, or someone higher up, wants to limit services and control movement, not open them up. But this introduces great risk: moving people are moving money. Limit services and the flow of people, and you limit the flow of money. In this scenario Hong Kong doesn’t have a future. More than anything, I hope Hong Kong gets it’s future back in 2020.

Sony, JR East, DNP, Aquabit Spirals team up for NFC tag payments

The JR East, Sony, DNP, AquaBit Spirals tie-up for NFC Tag payments

AquaBit Spirals CEO Tomo Hagiwara took up my challenge earlier this year to raise the Japanese Softcream Cashless Index (SCI) to ‘over 5’ in time for the Tokyo Olympics. I figure if mundane softcream stalls are cashless, Japan is truly cashless. Today his company is teaming up with industry heavyweights JR East, Sony and DNP to deliver on that promise and bring inexpensive MaaS (Mobility as a Service) NFC tag payments (via AquaBits SmartPlate) to the masses, and the masses of merchants who don’t want to shell out for NFC reader checkout hardware. It’s the first real NFC challenge to inexpensive, infrastructure light QR Code payment schemes that leverage the established base of mobile networks and smartphones. Small businesses only need to sign up for an online payment service and put a NFC tag sticker on the checkout counter.

Since all NFC flavors (NFC A-B-F) are required for smartphone NFC certification, Read/Write FeliCa tags work on any smartphone with NFC-F even if FeliCa transactions keys for card emulation (Suica, iD, QUICPay, etc.) are not installed. Translation: inbound Android devices can use NFC tag FeliCa payments even if they can’t use Suica.

The one remaining question on the Apple side of the equation is what NFC tag integration Apple Pay has in store. Jennifer Bailey announced NFC tag Apple Pay testing back in May without a delivery date, and no details since. Ideally an NFC tag integrated Apple Pay would use Sign in with Apple to streamline or eliminate 3rd party payments service account signup within an app, and without an app via background NFC tag reading. The more ‘it just works’ integration, the better. Nobody wants to signup for a PayPay-like service on the spot just to buy hotdogs and beer at a stadium game, or softcream.

Update: JR East issued an English language press release