Apple Pay is tailor made for Japan with public transport ticketing

Friday 9 September 2016 | 16:25 CET | Background
Apple has announced the launch of Apple Pay in Japan. Apple has built FeliCa and Suica support into the new iPhone 7. From the launch in October, users will be able to pay in retail stores by tapping the phone to a contactless scanner. Support for the domestic FeliCa and Suica payment schemes is included. Apple will launch Apple Pay in Japan in association with leading banks and payment providers. It marks the first time that Apple offers deeply integrated support for ticketing in public transport. 

Apple has announced that iPhone 7, iPhone 7 Plus and Apple Watch Series 2 will bring customers in Japan the ability to use the Apple Pay service beginning in October. Users will be able to commute and pay for everyday items with Suica from JR East, as well as make credit and prepay card purchases in stores, apps and on the web with a single touch. Apple Pay Support is not retroactively extended to iPhone 6, iPhone 6s and iPhone SE, which indicates different hardware.

Developed by Sony 

 FeliCa was developed over ten years ago by Sony, as a contactless card for payments. It was adapted for Suica, a prepaid smart card used in public transport – first with a few companies, later almost nationwide. Suica is also accepted in vending machines, kiosks and shops in or near stations. Leading handset manufacturers have built mobile payment services based on FeliCa. 

With 160 million transactions per day, FeliCa has become a prerequisite for the launch of Apple Pay in the Japanese market. Put simply, only supporting the EMV card scheme is not good enough, while Apple has a significant market share to defend. 

Apple is also introducing support for transit in Japan with Maps in iOS 10, so commuters can find ride details, including fare breakdowns that automatically show Suica pricing directly on their device. When Maps launches support for transit in Japan with iOS 10 in October, Apple Pay users will be able to map out and pay for their entire commute, including major train, subway, ferry and national bus lines, on their iPhone 7, iPhone 7 Plus and Apple Watch Series 2, based on updated fare and schedule information.

Limited presence in other markets

While the launch shows that Apple is able to integrate ticketing, it is not a given that other Apple Pay markets will see the same development. Sony has sold the FeliCa technology to several other markets, including Hong Kong, Singapore, Indonesia and Malaysia. 

However, these schemes are typically national or even local schemes, and therefore much smaller than in Japan.The same applies to platforms based on MiFARE technology. The MiFARE based system in the Netherlands, while national, is much smaller by comparison – around two billion transactions per year and limited to travel only. 

Though related and NFC-based, FeliCa is not directly exchangeable with other schemes, such as MiFARE. An industry group is busy developing MiFARE4Mobile and designing interoperability. An iPhone can be used in the underground in London, but that is because TfL (Transport for London) has adapted the stiles to accept regular EMV contactless payments. It is unknown whether Apple is working on MiFARE. Unless Apple shows otherwise, the combination of drivers in the Japanese market may prove to be the exception rather than the rule.

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