PAYGATE Station Android based smart payment reader

It’s rather unusual that a company would hold a press conference for a payment terminal but Daiwa House Group subsidiary Royal Gate Inc did just that last week for their new PAYGATE Station smart reader. Japanese IT journalist Satoshi Tanaka covered the rollout for IT Media.

The ‘thin client’ mobile Android based smart reader handles every payment protocol there is.

Contactless: EMV, FeliCa, MIFARE
Hardware: EMV IC, Magnetic stripe
QR Codes: D-Harai, Pay Pay, Line Pay, Ali Pay, WeChat Pay, Origami Pay, Rakuten Pay
Reward Cards: D-Point, Ponta, Rakuten

GMO Payment Gateway provides the payments processing backend for Royal Gate and Daiwa House Financial handles the business client support side. The product video shows the business target: small cafes, restaurants, boutiques. With the ever-widening rollout of EMV contactless and QR Code payments, Japan is turning into a very interesting and unique intersection point of Western EMV payments, home-grown FeliCa and China market driven QR Code payment schemes.

I don’t think having home grown QR Code payment systems around is a bad thing even though most Japanese don’t use them. The value is that it gives Japanese banks and companies a bargaining tool to use with Apple, Google, Amazon, Alibaba Group and WeChat. Never get in a sword fight without a sword.

Global FeliCa vs Galapagos Syndrome QR Codes

Back in the pre-iPhone era Japanese manufactures were busy churning out internet connected, e-wallet capable handsets with high quality cameras (for that time) that most of the western IT media pooh-poohed: ‘nobody needs all that fancy stuff’.

Unfortunately the Japanese IT media paid way too much attention to it all endlessly handwringing over the Galapagos Syndrome of Japanese technology that nobody seemed to need or want. Worse than that, people actually bought the media con. Then something strange happened in 2016 when Apple unveiled FeliCa Apple Pay and went global with it in 2017.

Google is now following the same path with a FeliCa Pixel 3 in Japan. Why would Apple and Google do that if FeliCa was stranded in the Galapagos? There is business value there, otherwise they would not be spending resources to do it. Most of the Japanese IT media has ignored this fascinating turn of events, focusing instead on the new darling of manufactured “QR Code mania” payment platforms: AliPay, Origami Pay, Docomo d-PAY (d-HARAI), Line PayRakuten Pay, Pay Pay. The merits are dubious:

Demerits of OR Code Payments

  • QR requires a good network connection
  • Slow transaction speed
  • Weak Security and QR Code Chinese payment apps keep transaction records in Mainland China
  • Device needs be on and screen active
  • No ‘on the spot’ refunds

Merits of FeliCa (NFC-F) Payments

  • Works without network connection
  • Very fast transactions
  • High security and transaction records stay in Japan
  • Device can be in battery reserve mode sleep or screen off
  • On the spot refunds

Fortunately there is one Japanese journalist who is calling it: Masahiro Sano. Sano san’s latest piece on Nikkei notes the irony of Japanese companies falling over each other to roll out useless redundant QR Code platforms because QR Codes are “standard in China” (and nowhere else), while Apple and Google are deploying FeliCa as one more standard checklist item on their digital wallet platforms.

Fake QR Code payment mania confuses customers. Put another way QR Code payment platform apps are about de-centralizing the digital wallet into an ever-growing collection of apps while Apple Pay and Google Pay are about centralizing different technologies into a unified and smooth user experience for payments, tickets, IDs, reward cards and more. Which approach do you think will win in the long run?

Sano san thinks QR Code payment platforms in Japan are not about public demand or customers actually using them. They’re just a fad that will fade and eventually be shipped off to the Galapagos. I think he is right. The evidence so far certainly backs him up.

NTT Docomo and SMBC bury the hatchet…maybe

It’s very strange that the JCB QUICPay network has gained the most benefit from the Apple Pay makeover of the Japanese contactless payments market instead of the Docomo iD network. Docomo invented the Osaifu-Keitai standard with Sony in 2004 and was the natural favorite, but iD has only treaded water while JCB has seen steady gains in QUICPay issue cards, customers and transactions.

Docomo iD problems boil down to bad blood between Docomo and Sumitomo Mitsui Banking Corporation (SMBC) who issue and manage Docomo d-CARDs and help run the iD payment network. Up until 2016 VISA d-CARD was king. Then something happened. Things got so bad between the 2 companies that Docomo removed all VISA branding from their website and Docomo stores strongly urge new customers to create a Mastercard d-CARD not a VISA d-CARD. VISA might seem like the target here but SMBC, the first Japanese bank to issue VISA back in 1968, are the real power behind the VISA throne in Japan, and the real target for Docomo ire.

VISA refusing to sign on directly with Apple Pay Japan or offer NFC switching that Mastercard, JCB and AMEX do is undoubtably a big friction point because it diminishes the iD brand and VISA d-CARD. VISA also half-heartedly pushing VISA Pay Wave again, with SMBC pulling, doesn’t help. Which makes the NTT Docomo/SMBC detente ‘let’s build a new future together’ announcement so interesting. Here are the 3 announcement points <with comments>

  • First of all Docomo and SMBC agree to start all over again to rebuild the d-CARD business and develop new services. <Nice boilerplate stuff with no promises and no deadline for delivering anything>.
  • Sumitomo Mitsui Financial Group will buy back all outstanding shares of Sumitomo Mitsui Card Co. (34% of the company) from NTT Docomo by April 1, 2019. <Why does Docomo want out of the credit card business? Do they think that credit card industry pricing and fee structures are unsustainable in the face of ubiquitous contactless payments of all flavors, online banking and ever more competition? Do they think the credit card industry is going to have to live on far less and have to aggressively restructure? Or is it something else like getting out of the 2 year contract subsidizing business? Inquiring minds want to know.>
  • Docomo NTT and SMBC will work together to develop and deliver more cashless solutions and expand the iD network. <That sounds nice but what does it really mean? Is VISA finally joining the Apple Pay Japan party? Is Google Pay support coming on iD?>

Like all cold war detente agreements, the proof will be in the pudding.

New NFC Pay Readers for J Mups and CardNet

New NFC Pay / EMV contactless capable readers are being deployed on J Mups systems along with the necessary backend support for VISA / Mastercard / American Express / J Speedy EMV contactless transactions. The flaky old FeliCa only but Apple Pay Suica Express Card dumb JREM readers are being swapped out with ultra reliable Panasonic JT R550CR units.

The finicky UT1-Neo readers used by CardNet systems will also be gradually replaced with new EMV capable UT-X10 readers with the necessary EMV backend support that CardNet announced back in 2015. The current installed base of UT1-Neo readers is 200,000. Hopefully the migration to the new NFC Pay capable devices will not take too long.

J Mups and CardNet are very popular payment systems for smaller Japanese retailers and shops.

iPhone X NFC問題Q&A交換ガイド

1️⃣ iPhone X Suica NFC Problem Q&A Exchange Guide
2️⃣ iPhone X Suica NFC問題Q&A交換ガイド (Japanese)
3️⃣ Apple Denial and iPhone X Users
4️⃣ iPhone X Suica Problem Index

This is a Japanese version of the iPhone X Suica Problem Q&A Exchange Guide
*このガイドは英語版から翻訳したものです(-.-;)

Q: iPhone X Suica NFC問題は何ですか?
A: iPhone X Suica問題はNFCハードウェアの欠点で、NFCエラー、特にエクスプレスカード使用する時にエラーが発生する。エラーのパタンは:平均3回に1回が端末側にエラーが発生される、2発目のNFCが問題なく通る、全体のNFCパフォマンスが不安定で鈍いという特徴です。

Q: iPhone X Suica NFC 問題の対策は?
解決は一つだけ:問題ありiPhone Xを交換することです、他にありません。
以下読者から寄れられたiPhone X生産集計情報を見ると、2018年4月までのiPhone Xの生産した台数にNFC不具合があります…が、2018年15週目からNFC改善されているiPhone Xが生産されているようです。改善されたNFC問題のないiPhone XはRevision B iPhone Xの名前を勝手につけた。Rev-B iPhone Xを手に入った読者によるとNFCパフォマンスがiOSバーションと一切関係なく、問題のないiPhone 7・iPhone 8と同じレベルで、パフォマンスの差がすぐ分かる特徴です。

iPhone X 生産 集計

iPhone X Production Tally 2018-10-6
Reader Feedback iPhone X Production Tally (as of 2018-10-6) : A simple tally of good/bad iPhone X devices and manufacture dates reported by readers to track production switchover from problem iPhone X devices to Revision B iPhone X devices. All iPhone X devices were running iOS 11.x and include both JP and international iPhone X models.

**2018年15週目からはRevision B iPhone Xへ切り替えているようです。

Q: 大きな問題ですか?
A: Yahoo ジャバンやGoogle検索する際、iPhone X Suica問題関連キーワード入力補助がよく出ますので、多くな方々が検索しているようです。

Q: なぜiPhone Xだけの問題なのか?
A:  iPhone 8・iPhone Xが同じNFCチップが搭載されているが、8よりXのロジックボード構成がかなり複雑で、ロジックボード上のRF(高周波)ルーティング問題、アンテナのスペック問題、他のコンポーネントとの相互作用、など考えられます。

Q: 日本だけの問題ですか?
A: いいえ、中国でApple Pay 交通系 IC カード(北京と上海)のユザーが同じiPhone X NFC問題を報告している、アメリカでも iPhone X ユーザーがこのブログを見てからこのiPhone X NFC問題を気づいてる。自分の2018年1月製造した「Suica 問題あり」のiPhone Xが米国ではApple Pay使用する際同じ頻度のNFCエラーが発生しているので、2018年4月以前、全てのiPhone X生産がこのSuica・NFC問題が抱えていると考えられる。

Q: なぜ日本外のiPhone Xユーザーがこの問題を気付かないのか
A: Apple Pay Suica エクスプレスカードおよびFeliCa環境が関係している。 日本レジ・POS・交通の決済インフラが高性能環境で、iPhone X Suica問題が目立つので分かりやすい。 欧米ではエクスプレスカード使用が無く、レジ・POS・交通の決済インフラが良くないので、通常のApple Pay使用で目立つことなく、分かりにくいです。

Q: iPhone X Suica問題確認方法は?
A: iPhone X Suica 問題発生している場合、iPhone Xシリアル番号をコピーし、ここにペイスト。2018年4月以前生産した場合、NFCハードウェア不具合ありのiPhone Xです。

Q: 「Suica問題あり」iPhone Xの交換方法は?
A: 簡単ではありません、時間とねばり強い交渉が必要。Appleサポート内部がiPhone X Suica問題を認めているが、公式に認めないながらも、交換には応じるという対応をすることです。ただし交換条件は初期化してダメだったら交換する。

初期化してもiPhone X Suica問題が直らないことをAppleサポートに説明してください。 Appleサポート係がiPhone Xを交換してもSuica問題を解決保証がないと説明します。 確認した上「交換をお願いします」と回答して下さい。

AppleサポートがiPhone Xを交換手続きし、交換方法は二つ:Genius Barで交換するか、または在宅自己交換修理する。iPhone Xハードウェア診断テストが行い、「問題ない」という結果が出ますが、確認した上「交換をお願いします」と回答して下さい。

最後に新しいiPhone Xのシリアル番号をチェック、2018年4月以降生産したことを確認して下さい。

お疲れ様でございます。

Q: AppleiPhone XSuica問題を内部では把握しているのでiPhone 8 ロジックボード交換プログラムのような修理プログラムを実施しますか。
A: 可能性が低いと思います。問題ありのiPhone X台数が多く、Apple Payユザー数が比較的少なく、欧米ユーザーやITジャーナリストなどがiPhone X Suica問題に対するの関心が薄い。iPhone 6sの突然シャットダウン問題・電池問題と同じレベルな騒ぎがない限り、Appleが前向きにならないと思います。

2019-5-25更新