How Apple Pay is set to drive an mPayment surge in Japan

Last updated: 26 September 2016

Apple Pay Japan

It’s been a great year for Japan in the mobile world, especially the country’s gaming giant, Nintendo. First, there was the rise of Pokémon Go, the AR phenomenon which has got millions of people active around the world, chasing Pickachus and Blastoises with their smartphones and smartwatches. Next, Apple CEO, Tim Cook, announced that iPhone 7 users would be able to play a version of Super Mario on their new phones. Now, there’s great news for the Japanese in the mobile payments sphere. You might be surprised to learn that Apple Pay isn’t yet available in the country, but the good news is it’s going to be available from mid-October, and we’re expecting a surge in NFC payment activity.

As well as gaming, car tech and robotics, Japan is already a leader in mobile payment and NFC technology. Since 2011, the Japanese have benefitted from Osaifu Keitai, a mobile phone wallet which can be used for transport and payments. There are currently 1.9 million contactless terminals in the country, available in supermarkets, cafes and fast food restaurants. Last year, the cashless infrastructure channeled 4.6 trillion yen in sales. We’ve reached a point where we have Japanese people who don’t even bother taking their wallets with them when they go out, as they’re so comfortable paying by mobile. Just why is it that Japan is so often the center of groundbreaking new technologies?

From mid-October, the cashless system is set for a further boost, thanks to the launch of Apple Pay. However, before we get too excited, we need to bear in mind the security issues. For mobile payments to work properly and witness mainstream popularity, it’s crucial the technology is secure and convenient for users. We’re proud to say that Gemalto will be partnering with Dai Nippon Printing to provide a cloud-based payment service, which will support the deployment of Apple Pay and meet these demands. To prevent fraud, the solution will use tokenization to conceal credit card numbers. Crucially, the security procedures don’t affect the quick and simple user experience.

To bring added convenience for the Japanese, citizens will also be able to manage their domestic and international mobile wallets on Apple Pay, with FeliCa and MasterCard. As a result, the Japanese will be able to pay with their mobile wallets doing in-app transactions.

We’ve already seen other countries enjoy huge mobile transaction growth following mPayment innovation, as we’ve discussed on the blog. The research firm, Strategy Analytics, expects Japan to drive over $30 billion in expenditure by credit, debit and prepaid cards by 2021, but admits that the launch of Apple Pay might lead them to upgrade their estimate. In a decade’s time, we wouldn’t be surprised to see paper cash and coins well and truly consigned to the history books in Japan.

Are you excited about the launch of Apple Pay in Japan? Let us know by tweeting to us at @GemaltoMobile, or by posting a comment below.

Leave a Reply

Your email address will not be published. Required fields are marked *