EDITORIAL: Will Apple have the ‘courage’ to play ‘catch up’ in Japan?

apple_japanThis editorial was first released on Monday 12th September. Contactless Intelligence Weekly News Review Editorial – Week 37, 2016:

I wrote on the topic of Apple only last week, but I am going to do so again today and then leave them alone for a while. I have to, really, since they have been all over the news with their iWatch 2 and iPhone 7 and the press has gone to town over the topic of audio jacks – or in Apple’s case, lack thereof, thanks to that one important ingredient all giant tech companies need – ‘courage’ (according to Apple spokespeople).

I don’t think that there really needs to be so much mock outrage over the topic – I have been sizing up a pair of bluetooth headphone for a while now and will use them with my iPhone so the audio jack question is of little relevance to me – as it should be to most people. ‘Ah’, say some of the more ‘switched-on’ folks, but what about those small businesses that are doing mPOS business using an iPhone with an audio jack?

‘Oh’ says I (and the rest of the industry) most mPOS companies will either use the audio jack to lightning connector as an interim method or do what I am doing and embrace bluetooth. This sentiment was echoed by Jack Dorsey, CEO of Square, during a recent earnings call, indicating that perhaps Square has been prepared for the potential for the jack to be killed off by Apple. “We want to make sure that they’re always a step ahead of everything that might change or will change in the future,” Dorsey said at the time in response to a question. “So one of the reasons we’re super excited about our contactless and chip card reader is that it works over Bluetooth. And that means it works with more and more devices and can work with more and more devices in the future. This is an open standard that every company is behind and something that gives our sellers the confidence that no matter how the technology shifts, they’re still always be able to make the sale.”

So, no problem there. Most of the mPOS players have some bluetooth connectivity.

What I DID pick up on, though, was the announcement that Apple is looking to take Apple Pay over to Japan and in doing so are having to do something they have never done before; customising their products to suit a very specific marketplace. Apple has confirmed that its new iPhone 7 and iPhone 7 Plus and the second generation Apple Watch will be equipped with Sony FeliCa NFC technology. The move will allow for Apple Pay transactions in-store, in-app and online as well as for transport when the payment service makes its launch in Japan in October 2016.

Specifically, the iPhone 7, iPhone 7 Plus and Apple Watch Series 2 models sold in Japan will support FeliCa Type-F NFC contactless technology, Apple said. While a number of tap-to-pay services rely on FeliCa technology, Apple is touting initial integration with Suica transit cards from JR East. With Japanese transit data set to go live in iOS 10, commuters can use iPhone to plan and pay for their entire ride, as well as buy products from retail locations where Suica, iD or QUICPay are accepted, the company said.

“We are incredibly excited to bring iPhone 7 to customers in Japan so they can experience the magic of Apple Pay,” said Apple CEO Tim Cook. “Apple Pay will transform your daily routine, from making your commute easier and more convenient than ever with Suica right on your iPhone 7 and Apple Watch Series 2, to using your favourite cards to make secure and private purchases with a single touch.”

In Japan, Apple Pay is anticipated to debut in October with support for most Japanese credit and prepaid card brands, including those offered by AEON, Credit Saison, JCB, Mitsubishi UFJ Nicos, Orient Corporation, Sumitomo Mitsui Card, Toyota Finance, UC Cards and View Card. Cellular carriers KDDI, NTT Docomo and Softbank are also included in the list of supported issuers. Apple’s online Apple Pay variant will go live at the same time.

Apple Pay is also expected to launch in New Zealand sometime this fall and is slated to activate Apple Pay services in Russia as well, although there are no specific timelines announced on this yet.

It will be interesting to see how Apple fares in a market that is already very mobile payment- and ticketing-savvy. One could argue that Apple is actually behind the curve in this geographical market and with their adoption of the FeliCa NFC standard within their system there is evidence that Apple, for once, is going to have to play catch-up!

Let’s see if they have the ‘courage’ to deal with that position or even if the market has the ‘patience’ to indulge them!

Steve Atkins
Contactless Intelligence

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Categories: Apple Pay, Editorial

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