Japan mobile payment survey results

I gave the Twitter survey function a workout and asked 2 questions:

  • Which Japanese mobile payment do you use most?
  • Which Japanese reward points do you use most?

The results are not surprising but come with many caveats: the survey sampling was puny, in English and pretty much limited to a small group of Twitter followers, which means they are pretty much already invested in Mobile Suica. Also it is important to remember that mobile payment use profiles in Japan are highly regional, what’s convenient in Tokyo isn’t necessarily convenient in other areas. That said, there are some interesting and fun takeaways.

Japanese mobile payment takeaways and feedback

  • The 55% Suica/PASMO figure expresses the power of Apple Pay Express Transit (and similar for Osaifu Keitai) for store purchases in the COVID induced face mask era without the hassle of Face ID. It’s important to remember that the ballyhooed Unlock with Apple Watch Face ID feature introduced with iOS 14.5 is useless for Apple Pay authorization. Remember too that Mobile Suica has good support on wearables: Apple Watch, Garmin, fitbit, etc., the widest mobile payment platform in Japan.
  • Despite the heavy marketing VISA Touch from VISA Japan, the majority of users have been using Apple Pay and Osaifu Keitai for iD and QUICPay, etc. I suspect EMV ‘Touch’ (Visa, MC, AMEX, JCB) probably appeals more to plastic card users as VISA is pushing EMV only plastic cards vs. digital wallet dual mode Apple Pay.
  • QR Code payment apps (PayPay, dBarai, LinePay, etc.) are not as popular as you might think and are probably feeling the pain of recent bank account linking security problems, and the recent revelations of user transaction records being stored outside of Japan.

Changes quite a lot. Recently using EMV touch a lot because of SMCC 15% back campaign and Amex 20% at FamilyMart. Otherwise probably a little bit of everything just to get maximum reward. (Tokyo)

I don’t ride trains so I have no real use for Suica. Using it to pay in shops is too much of a PITA since you have to constantly recharge it. (Kagoshima, note that Suica Auto-charge only works in JR East transit region)

I do iD for the point rewards (none in JP CC recharge of Suica) otherwise Express Transit is perfect. (Tokyo)

Mostly Suica (via Garmin Pay), but I’ve been using au Pay (QR or barcode) a lot more recently. (Hiroshima)

Japanese reward point takeaway
Results are complicated. Twitter surveys are limited to 4 choices, I lumped the Japanese carrier reward point systems for docomo, au and SoftBank (dPoint, au•PONTA, T-POINT) into one category, the top choice at 43%. However if we break down the carrier number by carrier marketshare ratio we get the following:

  1. 21% JRE POINT
  2. 28% Rakuten POINT
  3. 19% dPOINT
  4. 14% au•PONTA POINT
  5. 10% T-POINT
  6. 8% V POINT

The key takeaway for reward points is the power of the Rakuten ‘Economic Zone’, i.e. where all the Rakuten pieces including shopping, banking/credit card/payments, transit (Rakuten Suica), mobile, stock trading, travel, etc., are glued together by Rakuten POINT and feed off each other. The Rakuten Economic Zone is the model that others will have to successfully emulate if they are going to be serious long term competitors. NTT docomo announced a tie-up with MUFG this month, the digital banking wars are just getting started.

Japan’s new economic zone: Rakuten

The April 30 addition of iPhone 12 lineup to Rakuten Mobile marked the transformation of Rakuten Mobile into a first tier carrier on the same level of Docomo, KDDI au and SoftBank. Now that SoftBank is taking Rakuten to court over allegedly stolen SoftBank corporate secrets, I think we know who is feeling the pressure. It is the end of an era. SoftBank was the first carrier to launch iPhone in Japan back in 2007 when NTT Docomo refused and KDDI au could not (the Verizon iPhone problem). They cleverly used iPhone to leverage their position from an industry also-ran into a serious first tier carrier grabbing marketshare for the other majors.

Rakuten Mobile is now playing the hungry upstart with fresh ideas and aggressive plans: pay for what you actually use instead of paying for a monthly allotment just like the good old land line days…how original. Nevertheless SoftBank feels threatened not only by Rakuten Mobile but the total weight of the Rakuten Empire: Rakuten Pay which encompasses Rakuten Edy and Rakuten Suica, and most of all, Rakuten Point.

SoftBank has similar parts, PayPay and TPoint/TMoney (the latter is living on borrowed time), but they are not well integrated across the SoftBank empire and more importantly, they don’t have the synergy of Rakuten. The Rakuten Point synergy works across online shopping, online travel booking and online trading…and now mobile. That’s why people in their 20~40’s are sometimes referred to as living in the Rakuten economic zone, leveraging Rakuten Point as currency ‘plus’ to make their real money go much farther for all of their needs.

But there’s one more thing. Now that Rakuten Mobile has the full iPhone lineup, it’s only a matter of time before Rakuten Edy and Rakuten Suica join Apple Pay. That is SoftBank’s true nightmare.