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Apple a decade behind Japan on mobile payment curve

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By Karyn Poupee

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The headline word "behind" suggests inferior technology as much as it means "late to market." However, this is not the case. ApplePay introduces significant improvements to NFC payments. For folks who want privacy and security, ApplePay is the a huge improvement. Merchants receive only a one-time payment token. They do not receive the credit card number, customer name or anything else besides the amount due. Likewise, Apple does not receive any info about the store, purchase or location. All they do is use the token to send the amount to the card company. Moreover, if you lose your phone, no one else can make purchases because it checks the fingerprint on every purchase. Privacy and security superior to anything Japanese products during their ten years of stagnant technology.

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Apple a decade behind Japan on mobile payment curve

And Galapagos Japan has failed to monetize this and the record number of patents recorded each year globally because: a) too many of the managers of Japan Inc are mere caretakers, not entrepreneurs with the cojones their companies' founders had to create new overseas markets; b) companies are happier to compete domestically (the only market that really enjoys mindshare) against their yokonarabi peers (and their own internal silos) than with overseas competitors; c) it's clichéd, but language skills deny too many formidable leaders the ability to hold their own on the global stage.

Japan needs an economic 3/11 to wake her from this somnambulation. Perhaps Samsung could buy Sony?

-1 ( +0 / -1 )

apple has quite a bit of catching up to do.

Seeing as they are the #2 company in the world, I'd say that pretty much everyone else has quite a bit of catching up to do.

Nobody should use market cap as a justification for anything. Remember, Exxon and Microsoft were at the top for many years.

2 ( +3 / -1 )

apple has quite a bit of catching up to do.

Seeing as they are the #2 company in the world, I'd say that pretty much everyone else has quite a bit of catching up to do.

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Those arguing that they havent seen Japanese people use their phones to pay for things probably havent moved outside of their foreigner loving iphone owning circle of Japanese friends. Virtually everyone i know that doesnt use an iPhone, uses mobile payments; Even a few iPhone owning friends have Japanese phones as well PURELY so they can have their train pass, and payment system on it.

Remember Apple's other payment solution? That was supposed to be the bee's knees. Had a bunch of retailers on board etc. Now that is something I have never once seen anyone using in Japan. So unless Apple gets Japanese banks on board, i doubt this new system will make much headway.

-1 ( +0 / -1 )

Softbank added the iPhone to their lineup early on.... and for the next 3 years they watched their new subscription numbers grow and grow while DoCoMo's dwindled... it was not a coincidence. The Japanese are savy and they like quality... DoCoMo ended up finally putting the iPhone in their lineup. So many people talk about Japanese phones having so many cool extras... but none of them lasted after the iPhone came out.

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Considering Softbank was brand new in the mobile market when the iphone was released, and also considering the fact that they have offered the iphone since the first iphone, including them in your criticism seems a little misplaced.

your last point is incorrect. Iphone was not released in Japan until the 2nd U.S. model, (Iphone 3G) was produced. These were both released on the same day in July 2008. The original Iphone was released in 2007 in the US.

as for all the arguing over which payment system is better? I loved my Suica/Pasmo card for its convenience. Rarely used EDY on my PSP, lol. Too clunky. Apple will sink or swim in the NFC market based on what it integrates as far as the daily lives of Japanese, ie. suica is used EVERYDAY. Without integrating these functions into the Iphone NFC, it will fail in Japan. People may buy the Iphone but the feature will go unused. Apple will realize this after 6 months then make changes.

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Tend to agree with what @daito_hak has written but would add the following - NFC/the technology per se is here nor there. The trick that Apple pulled of to broaden the appeal of this payments feature was signing up all of the major credit card issuers, having access to the underlying payments network. This broadens the user appeal (I can still add to my air miles/reward points, insurance etc) to use this Apple payments feature. For Apple this will contribute to the Apple coffers since they again will take a cut/commission of the payment. The question is is why did the credit cards vendors allow this and what happens next. Think CD/DVD, iTunes.

1 ( +1 / -0 )

Agree... Apple's cellphone iOS is great. Yes Android can do many things but iOS is simple and extremely reliable. Apple controls the whole ecosystem so there is no fragmentation. Yes we have to trust Apple to give us what we need but so far I have no complaints. At some point Apple will screw it up... companies always do... but for now I'm still a loyal Apple user.

-2 ( +0 / -2 )

@daito_hak

Finally - someone who tells it like it is! You hit on all the right points, which come back to the point I was going to highlight. Apart from yourself, no one else has even touched on the real innovation from Apple - which is... drum roll please... SOFTWARE.

The pure genius of innovation is taking something inherently complex and making it intuitive and almost 'natural'. Apple did this with iOS, along with Multi Touch. I'm not trying to come across as some gung ho fanboy - I'm just telling it like it is. Intuitive UI design is not something Japanese tech companies do well, nor have ever done well. On the other hand, they've always been innovators in hardware design.

That said, you look at almost every tech segment now and it's dominated by innovations in software - which is not coming out of Japan. This is because software has taken on an entirely new design realm, as opposed to being purely "functional" - ie. put together by a team of engineers who don't have one iota of design flair.

The uninformed on here can bash Apple all they like but, at the end of the day, there's no denying that there's been a seismic shift away from hardware to software - and Apple has always been at the forefront of this.

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The most well-known example of this is the mobile phone, where Japan was initially streets ahead and had polyphonal, full-color flip-top mobile phones in the late 1990s.

This is plain flat wrong. Japanese phones were not better, they just sucked less. But in fact they were full, but full of features that no one could possibly find, all packed in awful, horrible user interfaces. The iPhone was a deliverance, I had two Japanese cell phones before the iPhone came out but they sucked sooooooo much, to such a level, sky high. They came with this huge manual book that nobody, absolutely nobody would ever read, being Japanese native or not. And those features that were advertised but it don’t work at all, like you know internet (more on that later) or some clunky implemented features like TV. You had a huge antenna on the side of the phone, this is was clunky, horribly ugly and not functional. The best you could get is a blurred image. The Japanese tech companies could not innovate, actually they didn’t need to do so, the market was so saturated with junk and they could just sell it to customers that didn’t have any other choice. Instead of packing their phone with useless, totally unusable features that nobody really knew about (you know like Samsung does today), they could have worked and fixed their awful user interface to any part of the cell phone that was mostly used by people. Emailing, messaging, call, localization (they had completely un-functional GPS modules backed by completely buggy software), listening to music or watching videos. Not only most of the Japanese cell phones didn’t provide some of these features, but the ones which did, did it with totally un-usable interface and software. Anyone remember typing anything other than Japanese on the keyboard of this phones, my lord, it was just silly. And what about the battery live of those things, don’t get me started, let’s just say that this is behind us and that the world is full of crap. To this you have to add that Japanese phones didn’t support Wifi (again a carrier like Docomo was absolutely against phones that could connect to anything without going through their network), their screens were totally bad (you hardly could read any text without putting it in front of your face), they were very slow, they were bulky, they are all made of cheap plastic, they would overheat quickly if pushed in doing intensive tasks, their OS was a mess, a total disaster, and you know things like sending rich attachments in emails were a no go.

These units were Internet-capable as far back as 1999.

This is also flat wrong and I am staring to question the honesty of the author. Basically most Japanese cell phone (and I don't count the one which were supposed to work with the full internet but asked you to wait 5 minutes every time you wanted to scroll a page ) couldn't display anything from the internet, the internet that people knew and were using on their computers. All of them were only able to display a very limited mobile version of a site if available at all with an incredible limited bitmap based drawing with pages essentially filled with text. Absolutely unusable, this is not internet, sorry. Or the users were locked to the iMode system owned by Docomo which was even not internet. It was a sort of intranet at the scale of Japan, totally text based that has just contributed to isolate more the Japanese population from the rest of the world. This is was a pathetic system, a disaster in technology, that only exited because Docomo had a monopoly and would force people to use it. Docomo has actually tried to force Apple to use their iMode system and Apple gave them the big finger. They were right, they chose to go for the user experience not with the biggest carrier in Japan. And it worked, Docomo has lost and now they distribute iPhones without this bizarre iMode.

Natsuno, who is now a professor at Keio University in Tokyo, says Japan should have looked into overseas expansion of its cutting edge contactless payments system much sooner.

How could they have done for that? This is utopia. Do you know why most of Japanese tech products don’t export abroad? This is because they are clunky, there is no way on the world that any mobile payment in Japan could have worked abroad. No chance, this is just too bad. And really, let’s be fair here, these Japanese companies don’t understand what people abroad want and like, they try to sell their phones packed with useless features for the sake of a check list, all packed in awful designs with today’s phones still still bulky and very ugly. Japanese don’t get good design, they really don’t get it. They really can’t produce something good looking, something literally beautiful. Just look at their cars, houses, interior furnitures, clothes, and so on. They just can’t sell abroad with such bad taste and poor understanding of what people outside of Japan want. Making a pokemon phone don’t sell abroad, they are a lucky that they can sell it here, in fact they can sell a lot of crap here. A lot of things are just poor quality.

Now, to conclude. Lets welcome the first easy to use, well designed and secure cell phone based mobile payment and lets hope that Japan won’t make everything to stop Apple bringing it here. Forget everything else, it just sucks.

-4 ( +1 / -5 )

@TakahiroDomingo... totally agree, their presentations are way over the top... but I do want an iPhone 6. Apple reminds me of Sony in the 1980's.... innovative and very well made. I've had my iPhone 4 for over 3 years now... luckily I have never dropped it... it looks as good now as it did when I bought it. I owned a Samsung cell phone before that... within 4 months the cheap paint had peeled off in the areas where I handled it. My iPhone 4 still has value... pretty amazing when you consider they are everywhere.

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apple has quite a bit of catching up to do. and each time they copy something, they present it as a new idea that will revolutionize the world. the great innovation this time around is "a big screen"

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I see alot of people who is speaking without actually taking a single step in Japan.

Felica cards can be used at all train stations at ALL toll gates most buses and even many taxi in major cities. They can also be used at ALL convenience stores in Japan. The two major gorccery retail chains issues their own cards and smaller chains connected to to transit companies accept Suica/Passmo cards. There also many vending machines that accept suica cards as well.

Too many existing systems not willing to change?

Give me a break.

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I had an NFC card inside my cell phone when I was living in Japan from 2006 to 2009. When I left Japan, I always asked why this kind of technology appears only to exist in Japan.

Japan must work more to export its technologies. I saw many many things that could be exported to the rest of the world.

-3 ( +0 / -3 )

Thats is the difference between Japan (and most of Asian countries), and western countries, especially USA. They have have invented many things but don't shout about them!

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I think Nokia invented this first before the invention of smart phones.

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danalawton1: The problem with Japan is that there are too many existing systems in place, to disrupt the old boys you get put in jail, just ask former livedoor CEO Horie or the CEO of Usen who went to jail for trying to complete against Docomo.

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The thing is... with the iPhone method you take an existing debit card and integrate its use into the cell phone. In addition this method is purportedly more secure than using the basic debit card itself. Now that the iPhone supports NFC I believe more and more U.S. Retailers will upgrade systems to accept it. I'd be willing to bet that in 5 years NFC payments will more common in more types of establishments in the USA than in Japan. Japan didn't invent NFC... as I said earlier... it was perfect for use with Japan's public railway systems... but the rest of the world was perfectly happy with their debit cards. No matter how much Japanese industry tried they were not going to capitalize on a technology the rest of the world really didn't need at the time.

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the NFC technology iPhone has is not proprietary, it will work with any NFC terminal

No it wont, apple will lock it down on the software level and the NFC chip type Apple use is different to the standard (at least in Japan). It just wont work, NFC isn't magic. Just because it uses the same technology does not make it compatible. It's exactly like DVD and region locking, just because the hardware is there doesn't mean it can "talk" to any device.

Existing hardware (In Japan at least) is going to have to be replaced / upgraded and because apple drops a token onto the phone (from their own servers) the hardware devices (or the mother ship to those devices) are going to have to communicate with apple (so apple can take their percentage points). And that's assuming apple allows 3rd party hardware makers or requires them to drop a massive amount of money for the "right" to take apple payments.

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The author of this article really doesn’t get it, it's almost laughable.

What is the problem of the author here, some anti-Apple complex or something? Why suddenly focusing on Apple and why not having wrote the same BS when Google introduced Google Wallet? Why putting Apple in a decade time frame, Apple has not been in the cell phone or mobile business for a decade anyway? What a bizarre statement.

Plus, the Japanese government with the complicity of the Japanese tech companies and network providers have done everything to lock out competition on the cell phone market during more than a decade (remember Nokia in Japan?). Even if a company would have came up with a mobile payment solution in Japan integrated in a cell phone, the Japanese busyness world would have made a hell of a life for this company.

However something changed, and it was the iPhone with the help of Softbank whose CEO is enough forward thinking to have understood that the Japanese cell phone market was not going anywhere. Everything has changed back then. You know why? Because for the first time in Japan, Japanese buyers could vote with their wallet and choose a far better phone than what was available in Japan (more about this later). And for the first time, the power has been taken out from the hand of Docomo who was basically doing everything to kill the competition on the network provider market with the blessing of the government (the old boys were getting their monthly checks I guess). Apple was smart enough not to play with these greedy pigs and go with Softbank, it changed everything.

This is flat non sense. Introducing a technology doesn’t mean that it is usable. This is a typical comment from people who really don’t understand what technology is supposed to do. Technology is supposed to be easy to use, otherwise it is useless. This isn’t what happened to mobile payment and NFC in Japan. Mobile payment here is just a jungle of different systems totally incompatible between themselves. They are all clunky implementations (like the FeliCa chips) that really is awful. I have been living living here for 12 years, I really really don’t see a lot of people use mobiles payments (even less with phones) in a country where everything is done with cash (I saw people bringing cash to the car dealer to pay for their car, this is that bad). Mobile payment here is a joke, there is no centralized system which is intuitive and more importantly secure. Security is an after thought in his country, so are the mobile payments here that would need to provide a transaction with your bank and I am not talking about the cards that you load with money and that you can use to pay, they are useless (what is even the point). In fact systems that directly allow to use your credit card for mobile payment are rare and again absolutely not trustable.

Now either one live in a denial like the author who wants to claim that Japan is so an advanced country but which still relies a lot in fax and paper documents (anyone has received one of this ridiculous book for recording the medicines that you buy? Yes the one that you have to stick a peace of paper in it? Hopeless…). Or one looks at the market frankly and honestly and recognizes that mobile payments are a joke in Japan, only a fraction of people use it and that the country is really not the technology hub some people believe it is (yeah those bank books, those Hankos and so on….)

-3 ( +3 / -6 )

Americans are more concerned about fraud than the Japanese.

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"The reason "Smart Phones" did not take off in Japan is because Japanese phones were already smart."

Really? Then how come my Japanese handset couldn't support my email account or receive attachments, etc? How come it could't connect to Wi-fi and connect to the regular Web? Why couldn't I send SMS cheaply, or to handsets from other carriers?

How come I didn't have thousands of Apps to choose from?

How come come diplomats and executives at multinational companies and other serious people in Japan in the nearly 2000s used nothing but Blackberries?

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If you want to see future of NCF you have to go to Korea.

0 ( +1 / -1 )

Apple Pay will take the payment method to another level much more secure than the use of credit cards

This is just a new challenge for hackers to try and best. It will happen, it's only a matter of time.

0 ( +0 / -0 )

This article is a little one-sided. Where Apple has innovated is in the technology behind Apple Pay, where everything is encrypted on a hardware level on the Secure Element chip. Then each transaction is given a one-time number, so it's discarded upon purchase. This has required many deals to be made with the big banks and credit card vendors.

With Japanese banking stuck in the 1950s, these types of deals will never happen here. Sure, NFC is used widely here, but only in the transport realm. Japan is still very much a cash society.

-1 ( +0 / -1 )

Who cares. It's still a great phone,even when jp phones had cameras,Internet and phone payments. Yep apple are late,but its a great phone that leapfrogged jp makers. Not does the new iPhone have NFPayments in Japan ? If not, then I can't be bothered upgrading as my 4 does the same stuff. Lol still a sexy phone.

-1 ( +0 / -1 )

simply put, there is no innovation if there is no action. Also if you are living in the world were could've and would've have more merit than did and done, you're going far in this world.

1 ( +1 / -0 )

I believe the first iPhone-style smartphones sold in Japan also weren't that popular because most of them lacked the FeliCa standard NFC needed to replace Suica, Pasmo, Edy and other prepaid (but refillable) contactless payment cards. The garakei phones got FeliCa standard NFC early on, and by 2012 many Android smartphones sold in Japan also gained that capability.

Because the iPhone 6 now has NFC that is likely FeliCa compatible with a software upgrade, that's why I said Apple Pay may get Mobile Suica and Rakuten Edy compatibility when Apple Pay rolls out in middle October 2014, Apple's stated time frame to roll out this payment service.

-1 ( +0 / -1 )

Strangerland

Yes?

Docomo, Au and also Softbank are infrastructure providers not manufacturers. They don't have much say in future hardware that hadn't been developed yet.

Ok. What exactly is your point? Or rather, how does it relate to anything I've said?

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Strangerland

Docomo, Au and also Softbank are infrastructure providers not manufacturers. They don't have much say in future hardware that hadn't been developed yet.

-3 ( +1 / -4 )

Smartphones could have been introduced and developed years earlier in Japan but for the insatiable greed of docomo, softbank and AU.

Considering Softbank was brand new in the mobile market when the iphone was released, and also considering the fact that they have offered the iphone since the first iphone, including them in your criticism seems a little misplaced.

-3 ( +1 / -4 )

The reason smart phones "did not take off" in Japan is because the big 3 didn't want to introduce them. Smart phones give totally free access to the internet while tens of millions of Japanese cell phone users were paying through the nose every month for each doctored keitai site. Smartphones could have been introduced and developed years earlier in Japan but for the insatiable greed of docomo, softbank and AU.

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Raymond Chuang

I doubt it no one is going to go through the hastle you discribed to pass through a toll gate at the station. As danalawton1@yahoo.com eloquently described it's all about speed and as it becomes more diffused into society it becomes more about convenience not requiring to carry small change. It may become a disconvenience in the western nation required to tip everytime though.

-3 ( +1 / -4 )

I think one issue with NFC in Japan is that of security: there were LOT of concerns early on that stolen cellphones could be used to make unauthorized purchases--and security on the cellphone itself was not strong enough to prevent such usage. On the iPhone 6, the combination of requiring the use of Touch ID fingerprint identification and the fact the code sent for payment is a one-time use only encrypted token code that does not send the credit/debit card's number, expiration date, security number and (in the case of debit cards) Personal Identification Number (PIN) makes it quite secure.

I believe that Apple will soon announce that Apple Pay will be compatible with Mobile Suica and Rakuten Edy NFC payment systems, and will roll that out when Apple Pay is activated worldwide in middle October 2014.

0 ( +0 / -0 )

This Professor Natsuo... obviously did not do his homework. Instead of just blabbering off about "bragging rights", maybe he should have studied why Japan didn't spread their early NFC technology overseas. By studying why Japan embraced it in the first place also answers this. NFC works great when you need speed and accuracy. With Japan's massive rush hours in Tokyo and Osaka it made sense to use the technology... they could do away with Ticket Punchers and machines with many moving parts that broke down constantly. That was it. All the while most of the rest of the world... that did not have such a large and necessary railway / subway system were quite happy with their debit cards. The funny thing is.... I only carry a Debit card while in the USA. I always carried cash while in Japan. Japan did a great job with it... but it was out of necessity and pure economics. The economics of introducing NFC in many other places while an easy to use Debit / Credit card system was everywhere just was not there.

1 ( +1 / -0 )

You know, my comment to this headline is, "So what!" Apple never included the chip because there was no demand for it. It has nothing to do with technology advancements. Yeah, you might have one in your old flip phone or in you Galaxy, but do you actually need it or use it? To me, this is not an innovation in iPhones. It's just a sell out to satisfy the few that like to bag everything Apple! The thing I notice most often aboutApple naggers is, they have never actually owned an Apple product and if they did, they were to stupid to work out how well it works for them.

-5 ( +0 / -5 )

If the Apple Pay works in Japan, it will be nice. I wonder if we'll be able to put our commuting passes on them.

-1 ( +0 / -1 )

I have an EDY NFC card. I just went to a convenience store to buy a can of coffee, a pack of cigarettes and a roll of garbage bags and pay my waterbill.. I couldnt pay all items jointly and the garbage bags and the waterbill were cash only.. I dont ride a train every day to work. For me, NFC is pretty useless regardless of who is supporting it.

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I wonder why "Apple pay" is so conspicuously missing from the Apple JP iphone6 web introduction?

0 ( +0 / -0 )

I think Apple Pay is going to be huge! Ye have to think worldwide, not just America, or Japan, etc. My understanding is like Samurai says above - the NFC technology iPhone has is not proprietary, it will work with any NFC terminal. I've had my American credit union based visa card NUMBER (just the number) stolen three times, one time by a Japanese man in Japan! My number was used to buy over ¥200,000 worth of goods hundreds of kilometers away from me. Whew, what a hassle for me, even though I didn't lose any money, I had to spend over two hours on the phone with my American credit union calling from Japan. Plus, I could not use my card to withdraw yen from Japan post office ATM, my method of getting cash in Japan. Apple Pay via iPhone will save banks and merchants much money because of its security, plus save us consumers much headache. I use and love Suica cards, and I'm all in for iPhone and Apple Pay. Actually, Apple Pay is making me buy my FIRST ever iPhone. I'll probably go ahead and get an Apple Watch too!

0 ( +2 / -2 )

yep, as an outsider in japan, i am not sure as well how the keitai payment has been used here. as long as i already have pitapa integrated in my credit card (for non-cash payment) and icoca (for cash payment), i think that is just more than enough. for other payments, i just use hard cash.

0 ( +0 / -0 )

They are not faking anything, but releasing units for sale in a fashion that can create a Sold Out announcement is good publicity.

0 ( +1 / -1 )

Apple: A decade behind. Period.

1 ( +6 / -5 )

At how many unit, smith? Easy to fake hype by having an extremely limited number of units available then when those are all gone say "WOW look at demand!" And that's exactly what's happening with the iPhone 6, by and large.

Every successive iphone release has sold more units than the previous. It's doubtful that they need to fake the numbers, the odds are that this release will follow the same trend as the previous releases.

1 ( +1 / -0 )

iPhone six sales have been out any pre-order purchase previously, and are already sold out in many cases before going on sale

At how many unit, smith? Easy to fake hype by having an extremely limited number of units available then when those are all gone say "WOW look at demand!" And that's exactly what's happening with the iPhone 6, by and large.

Not because Japan invented it, but once again because Apple made the technology or else just spread it through the popularity of its products, as is the case here. Try using your gara-kei to pay for something overseas.

Why would you need or want to do that? For how many people is that an issue? You think that this Apple Pay is going to be linked across all banks in all countries with all the different laws and regulations? Of course it isn't.

-1 ( +1 / -2 )

The reason "Smart Phones" did not take off in Japan is because Japanese phones were already smart. Most fo the stuff smart phones were supposed to be great for were already on regular cell phones. And there is a right wing current saying that the reason for the Galopagos effect is that Japanese are the only ones smart enough to use them (on Ch. 2).

-4 ( +2 / -6 )

And to think Apple once was against NFC

1 ( +2 / -1 )

It show that neither Smithy or Jeff resides in Japan or would not make such obvious mistaken remarks.

The Felica card is an ubiquitous technology here in Japan and Japan would basically come to a stand still if the system was to fail (especially in the morning rush hour).

1 ( +6 / -5 )

I don't see using my iphone to make payments if it's not compatible the Japanese system. I wonder if Apple has thought this through - it's not like every train company and convenience store in the country is going to switch systems, just because Apple decided to go with a different technology.

Japan wants bragging rights to this tech but even here it is barely used

What? Millions of people use Suica/passmo/whatever every single day on the trains. It's a hugely used technology. You an also pay in pretty with it in every convenience store in the country, and people regularly do.

4 ( +6 / -2 )

We use Edy to make payments quite often; it's built into my credit card. I don't need a phone for that. For train and plane tickets I always buy online with a credit card. I long ago gave up on travel agents whose cheap, advertised fares never seem to exist.

2 ( +3 / -1 )

Oh boy talk about self infatuation. I look over an e-commerce site and the rate of credit card usage is the majority not the minority. If and when they accept Visa, Mastercards, etc. they are obilgated to accept those cards regardless of issuing their own cards.

The only way to charge a seperate surcharge is to develop another site in which one accepts only money transfer and the other site accepts only credit cards in which they hike up the price to include surcharge but those sites are completely the minority and it costs more for the e-commerce site owners to maintain two seperate sites so they rather have one site to accept both.

Don't care about your pet speculations either. Apple CANNOT lock the NFC since they do not have the rights to. It's basically a black box in which they are required to use it as they are supplied by whichever company they choose. There is a data transfer protocol which is required to be followed to ensure the data to be sent to the data center.

I suggest you quit while you are ahead since I been in the marketing field for the last two decades specializing in data-base marketing.

-1 ( +7 / -8 )

Some of the people on here busy thumbing people down for the facts are simply choosing to ignore said facts because they present a number of unpleasant realities regarding Japanese tech, the use of tech in Japan, and the fact that people whining about what Apple is doing sound like sore losers.

Samurai: "I been using my Osaifu-ketai for the past decade and the main reason why I do not want an iPhone."

I don't group you into the above category, by the way, I just cut and pasted what you wrote to say that you should be happy you can now buy an iPhone if that was the main reason why you did not before. And here's the added bonus: if this payment method is a major convenience for you you can now use it around the world (or will be able to soon); I daresay you probably cannot give me the name of a single place outside Japan where you can use the Japanese tech. As for companies not being allowed to add a surcharge, they can indeed, just not directly. What they do is require you do apply for a credit card DIRECTLY related to that company (you can't use your regular VISA, you need one from that shop), and set their own interest levels. A slightly different argument, but still points out the fact that Japan is cash based, or else they can find a way to turn you off using other methods if they are even allowed in the first place.

"Tickets are bought on-line these days..."

Well, your comment is self-defeating for two reasons. One: tickets are NOT bought online these days, or at least not by the majority of people here. Most are still paranoid about credit card account theft, despite this being the only nation that suffers so massively from ATM "wareware" cons, and even if they DO book the tickets online, they then go pay cash at a convenience store or pay by wire transfer (or use TWO middle-men and go to the Loppy machine, print out the ticket info, and then pay in cash at a convenience store). Second, if you're using the online purchase argument to counter the fact that Japan is behind in terms of being cash-based and not having a debit system, etc., then the whole point of the Japanese keitai tech being invented first is moot.

Again, though, and even if gogogo is correct, albeit bitter, about Apple doing what they do because they can, the fact that the iPhone six sales have been out any pre-order purchase previously, and are already sold out in many cases before going on sale, and the sheer popularity, ensure that this payment method will be available for use world-wide before long and will spread. Not because Japan invented it, but once again because Apple made the technology or else just spread it through the popularity of its products, as is the case here. Try using your gara-kei to pay for something overseas.

And I'm not even interested in the function.

-3 ( +8 / -11 )

It's interesting how carriers like Softbank can heavily customize iPhones.

1 ( +1 / -0 )

Gogo

Don't look at me I had never voted a down thumb to anyone, only thumbs up vote.

As for NFC regulating consortiums there are two one controlled by Sony and the other by NXP Semiconductors.

Neither is going to allow Apple to modify it for their own special purpose.

-2 ( +5 / -7 )

Jeff lee. I think we are talking about cell phones being stolen and SIM cards and how it contributes to phone theft.Tthe UK had 700,000 phones stolen and .the SIM card makes it easier.but as for crime generally in Japan.mmmmm maybe others can jump in here but I feel safer here than I do in my own country,and I don't feel I have to worry about my kids here.

4 ( +6 / -2 )

SamuraiBlue: Thanks for the vote down, perhaps you'll do some research next time:

Osaifu-keitai (Docomo), which can also be used to unlock doors and log into computers, uses near field communication (NFC) type C chips, different from the type A/B chips that Apple is thought to have chosen, people familiar with the matter said.

http://blogs.wsj.com/digits/2014/09/11/long-before-apple-pay-japan-had-mobile-wallet/

-1 ( +7 / -8 )

Apple are stuck in 2010, still. My 3G Sharp 942SH STILL has better specs than the rubbish they squeeze out.

-1 ( +9 / -10 )

gogo

Apple can't lock the NFC cards for themselves since the chips are already supervised by a source group. I don't think apple modify the chips on their own without the approval by that group.

-9 ( +1 / -10 )

This is symptomatic of Japan's approach to cell phone technology over the last twenty years. It developed new technology before the rest of the world and then failed to export it. The Japanese all had colour cell phones with cameras and email while the rest of the world was using black and white Nokias.

That has changed. Apple and Samsung are common in Japan and Japan has nothing to offer the rest of the world. In fact, it seems a little backwards - like those quaint WIFI boxes people carry around with tgem.

2 ( +5 / -3 )

The Apple NFC chip is incompatible with everything existing out there because Apple can, Apple loves lock in and wants all the payments for themselves. They wont open it up to other developers or apps because that would be cutting apple out of their percentage.

1 ( +9 / -8 )

While mobile payments in Japan have reached advanced levels, firstly there are many countries where the same level of secure services are not available. Apple does not manufacture products just for Japan, but for the world although Japanese companies benefit from total Apple sales, about 30% of Apple profits go to Japanese companies, which In turn means Japanese employee's and Japanese taxes paid.

Apple Pay will take the payment method to another level much more secure than the use of credit cards which again the theft and misuse of cards in Japan is far less than in a country like America which losses $billions every single year and eventually the loss is passed on to all the honest customers.

When I first came to live in Japan some 20+ years ago! it was very difficult to use a credit for paying and even today there are still too many times when only cash is accepted.

8 ( +11 / -3 )

Tickets are bought on-line these days and by law you can't place seperate surcharge to people paying with credit card in Japan.

-8 ( +4 / -12 )

In Japan, it's largely been a work-around for the poor and expensive credit card infrastructure. Demand for these services in the West isn't so great because plastic money took hold long ago.

For the tech, Japan remains a paper bill and coin society, to a much greater extent than anywhere else. When I pay for airplane tickets, I need to pay with cash or get slapped with a surcharge. I recall stuffing an envelope with a stack of 10,000 notes to make my payment. Seems ridiculous, but that's the day to day reality here.

"The reason we don't use sims in Japan is to stop cell phones being stolen..."

So crime is a bigger problem in Japan than in the West?

0 ( +11 / -11 )

Smithy

The Felica chips used in Suica/Pasmo/etc. transit cards around Japan are held by most all who transit via public transportation with a monthly pass in Japan. They also charge some cash by various items like newspaper and/or drinks at the Kiosk. It is also the one behind Ed/Waon/NANACO cards which are centered towards usage at stores and restaurants. I don't know of a single Japanese that doesn't carry one. Even my mother at the ripe old age of 80 has one and uses it to pick up grocery at the local Ion store.

I been using my Osaifu-ketai for the past decade and the main reason why I do not want an iPhone.

11 ( +21 / -10 )

I agree with Abe234. There is a reason for no sim card phone and I don't think that should change. As it goes for many other things that we find odd. Everything has a reason. They probably test that sistem in Hong kong first to see how it would function in a crowded area before implementing it home.

-3 ( +8 / -11 )

Smithinjapan. The reason we don't use sims in Japan is to stop cell phones being stolen.steal a phone in the UK or USA and stick in a new sim.and then there is a new phone. There is a reason,why I can leave my phone In a shop in Japan.forget it ,and go back an hour later and still get it back. I don't think that happens so much in e UK or the states.sims cards are for the benefit of the company and not the user.have a phone stolen,and you need to. Uh another one.

-4 ( +10 / -14 )

*paying

-3 ( +2 / -5 )

Strangely I've never even once seen a Japanese person laying with their cell phone for anything in the last ten years. I doubt much will change about this. People don't buy an iPhone for the NFC chip.

-16 ( +6 / -22 )

'The fact that “we didn’t extend this concept to the rest of the world” means that now Japan “can’t do anything” about Apple’s bragging over their innovative iPhone 6 with an NFC chip, he said.'

Japan wants bragging rights to this tech but even here it is barely used, and why is this suddenly being adopted by Apple? because it was not necessary as an alternative to cash. Even today in Japan the places that will allow you to use your bank ATM card instead of cash or credit cards (or cell phones) are almost nil. The last time I went on a trip overseas I had to carry more than $3000 cash to the travel company because the only thing they would allow besides cash was a Visa card -- and you had to apply for an HIS only Visa card even then. Which is to say, again, this kind of tech was not and still really isn't necessary overseas -- it's just an additional function you can opt for among many others.

To add on to this, while Japan does indeed often first come up with some innovative tech (and also the most useless stuff on the other end of the spectrum, but we'll leave that to the worst invention awards!), they often don't implement it at home, and if they do, as the story says, it is incompatible with the rest of the world. Only now are they talking about allowing SIM cards in phones to be swapped so that you can use the same phone overseas locally and without roaming, where the rest of the world for the most part has been able to do for some time. Many ATMs won't allow you to use foreign cards. And when Japan came up with the tech in question to begin with, as was stated, it was used first in Hong Kong and only later implemented in Japan.

Quite frankly I would rather see convenience stores, vending machines, ticket machines, and the lot allow you to use your cash card first and the debit system.

-2 ( +15 / -17 )

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