Tag: VISA JP

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

Mastercard but no VISA

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.

Suica App 3D Secure authorization for all non-Apple Pay in-app purchases

More fallout from the VISA JP Apple Pay agreement: JR East announced they will implement 3D Secure in iOS Suica App, requiring authorization for all non-Apple Pay in-app purchases.

Suica App is convenient because it works hand in glove with Apple Pay and app registered Japanese issue credit cards, giving users the widest possible card coverage. Since 2016, Suica App was the only work around solution for using VISA JP cards for Apple Pay Suica recharge.

With the VISA JP Apple Pay deal however, we are seeing a bunch of credit card backend changes, like merchant code changes that eliminate Suica recharge 3x travel points for Chase Sapphire Reserve VISA holders. JR East is changing how Suica App works, 3D Secure authorization for all non-Apple Pay in-app purchases is part of that. For users this means doing Suica recharge and commute plan renewal in Wallet instead of Suica App to avoid 3D Secure login hassles. Wallet is the hands down easiest way to recharge Suica and renew commute plans.

We’ll see a Suica App v3.0.4 update when 3D Secure is in place, likely after the new Eki-Net launches June 26. PASMO App already uses 3D Secure for registering cards but not for in-app purchases.

With direct Wallet addition of Suica cards starting with iOS 13 coupled with last year’s migration of Shinkansen eTicket functionality to Eki-Net, and the addition of VISA JP Apple Pay in-app support, Suica App is less essential than ever. The only reason for using it now is new commute plan purchases, Auto-Charge setup (which remains the 3D Secure free way to recharge) and receiving Suica Pocket recharge rewards.

There are some VISA JP cards that still don’t support Apple Pay in-app, MUFG holders still have to recharge the old Suica App way. Whatever the reason, the across the board change will be likely be very unpopular with iOS Suica App and Android Mobile Suica users.

UPDATE July 20, 2021
3D Secure is now required for registering credit cards in Suica App. So far there are no reports of 3D Secure confirmation required for Suica App in-app recharge or Green Car Seat upgrades. This matches my own limited testing. I’ll update this post if anything changes.

Any purchase in Suica App can be made with Apple Pay instead of the app registered card that bypasses 3D Secure, Suica App registered CC on the left, Apple Pay on the right

Mobile Suica foreign VISA card processing changes with the Apple Pay VISA JP agreement

Foreign issue VISA card holders using Apple Pay Suica beware, you might be in for a rude surprise when you get the monthly statement. A reader sent some very interesting information:

JR East started processing these Visa transactions differently on foreign cards. Previously, these were processed as ‘SUICA MOBILE PAYMENT’ and the merchant category was passenger railways (travel). Since around May 11 or 12, these are now processed as ‘MOBILE SUICA APPLE V’ and the merchant category is catalog merchants (shopping). This is an unfortunate change as the merchant category change from travel to shopping downgrades the points earning capability on several American cards (eg. from 3x points on the Chase Sapphire Reserve to 1x).

Chase Sapphire Reserve has been a popular choice for Apple Pay Suica recharge because of the 3x rewards. The VISA JP Apple Pay agreement has changed how foreign issue VISA brand card payments made with Apple Pay in Japan are processed obviously, but the merchant category change from railways/travel to catalog/online shopping is a mystery. JR East or VISA JP? On the surface JR East as they are the merchant but why this and why now? Another backend change: JR East is starting 3-D Secure credit card checks in iOS Suica App and Mobile Suica (Android) from May 26.

I do not know if Apple Pay PASMO is in the same boat but suspect so. Foreign issue VISA holders may want to consider using a different credit card for Suica recharge for the best reward points. There are too many reward point differences to make any definitive recommendation. The best long term strategy is to examine your spending patterns and select a JP issue card that fits your needs. Reward point empires to consider: JRE POINT (BIC CAMERA View), Rakuten POINT (Rakuten Card) and V POINT (SMBC Numberless Instant issue).

I will update this post as more information comes in, reader feedback is appreciated.

Update: Good news: a reader reports Apple Pay PASMO recharge still codes as travel for Chase Sapphire VISA 3x travel points. Reader and user comments:

I setup Pasmo in Apple Pay and ran a test transaction with my Chase Sapphire Reserve.  Good news, Pasmo is being processed differently and coding as passenger railways (travel).

I also noticed JRE’s category change for GooglePay Suica a few months ago.

With US credit cards, the Chase Sapphire Reserve (CSR) and the Chase Business Ink Preferred both had 3x points on Travel. If you had used them to charge your Suica via Apple Pay or Google Pay, the charge would show up as ‘travel’ or ‘jr east’. So you were effectively earning 3% cashback (technically more with the multiplier of 1.25 or 1.5 based on the card). The wonderful thing was that you could pay for almost everything in daily life with Google or Apple pay here in Japan. It does seem this has changed. I dropped my CSR a while ago – now it is time to let my Ink go too.

New vs old Google Pay Suica charges