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Digitimes Research: Mobile e-payment services in Japan promising

Hana Hu, DIGITIMES Research, Taipei [Tuesday 5 September 2017]

Apple Pay and Android Pay - launched in Japan market in October and December 2016 respectively - are expected to hike consumers' willingness to use mobile e-payment services, as the iPhone has a high share of the smartphone market, and for the latter, HCE (host card emulation)-F software architecture has been adopted for Android devices.

Unlike credit cards that use NFC Type A/B for mobile e-payments, providers of handset-based e-wallet services in Japan adopt FeliCa, Sony's contactless RDID card system based on HCE-F technology. FeliCa has dominated mobile e-payment market in Japan, according to Digitimes Research.

For the Japan market, Apple has launched FeliCa-enabled iPhone 7, iPhone 7 Plus and Apple Watch 2 and cooperated with transportation/credit card issuers Suica, QUICPay and iD to provide Apple Pay services. Based on a smartphone penetration rate of about 70%, a smartphone market share of about 60% for iPhone and an average life cycle of two years for smartphones in Japan in 2016, there are about 10-15 million Apple Pay-supporting iPhones in use in Japan currently.

For the Japan market, Google has adopted HCE-F software architecture for Android 7.0 and above smartphone models to enable users to make payments at FeliCa-based devices. The adoption of HCE-F targets not only local consumers but also foreign tourists who use Android smartphones supporting NFC but not FeliCa in Japan, especially those expected to visit Japan during the 2020 Tokyo Olympic Games.

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