Your iPhone has Super Powers…in Japan

– Hey, guys This is why Apple Pay is all that Ken talks about every day at the office

– It's the future – Oh my, – It's so easy – You have to share my pain, though – What do you mean? (beep) I think it's genuinely the best thing that Apple's doing right now – Whoa

– Like, low key – Whoa – Like, very low key One of the main reasons as to why I like Apple Pay is because I legitimately use it on a daily basis, especially now that more and more places are accepting it This means carrying around less credit cards and, well, taking around more receipts and stamp cards

Not only are more and more businesses taking Apple Pay, but as of late, point of sale NFC readers are getting faster and more consistent I'm finding myself fumbling with my phones less and less since it just works super well now, especially for more mundane transactions, like transit, the dream of leaving your wallet at home is coming closer and closer to reality – So, when we thought about Apple Pay, we really thought broadly about wanting to do services that replace the wallet – [Ken] This is Jennifer Bailey, a VP at Apple that oversees Apple Pay, chatting about it at a conference talk in 2018 – It seems like the big opportunity here is to disrupt the credit card industry

– We don't sit around and think about, oh, what industry should we disrupt, we think about what great customer experiences can we develop? (record scratches) – [Ken] Wait, Apple doesn't want to disrupt the credit card industry? – We're introducing a brand new service, Apple Card (audience applauds and cheers) – [Ken] Okay, there might be some conflicting PR speech going on here, but I think what Bailey says in this chat has some merit on the business end that anyone can understand – It's all actually about making people love their iPhones That is what, why we are doing what we do – So like, what do you think about all this, because I think both of us use Apple Pay a lot

– If you can leave your wallet at home and have everything on one device, you know, granted it's safe and you know that the downsides are pretty minimal, it's a pretty interesting proposition and I think, I mean, Apple more than anyone else is all about just that one device life, right? And that one thing that can do everything Regardless of whether Apple is trying to disrupt the credit card industry or not, both the Apple Card and, specifically, Apple Pay are at the very least, the companies answer to improving how we pay And that's important because at the end of the day, killer software and services, like Apple Pay, are what make that sweet, sweet money (jazz music) Nothing else has shown me how much easier Apple Pay makes things more than being here in Japan and using this Suica is a prepaid transit tap card that people use here in Tokyo to get around the city

And when Apple added it to its list of compatible cards on Apple Pay almost three years ago, it was low key a really big deal To understand why, it's important to look at the scope of Suica's importance – (speaking in Japanese) – Suica is universally accepted across all major rail networks in Tokyo, but is primarily overseen by JR East, a major rail company that operates some of Tokyo's busiest rail lines The company's most recent report states that there's 758 million physical and virtual Suica cards in circulation

Whoa Considering the population of Greater Tokyo is estimated to be at around 39 million people, it can be inferred that Suica is a vital part of daily life in Tokyo since a majority of the population commutes – Are we gonna just acknowledge that this is all just a ploy because you wanna shout out, your This Is episode all about trains in Japan? – I mean, the boss-man isn't wrong Because Japan, urban commuting is a huge part of daily life It's hardly surprising that trains, countrywide, average about 16 million rides a day, or 6 billion rides a year

And with certain stations, such as Shinjuku, that's behind me, servicing as much as 35 million passengers daily, and some of the city's other major hubs numbering relatively close, Suica is the key to preventing bottlenecks of commuters at the station gates, in that it's the fastest transit tap card in the world Physical Suica cards are one thing, but putting it in phones is a whole other Let me explain So far in the story, we have Apple Pay that aims to eliminate your wallet from existence, and Suica, a transit tap card on steroids that's used by a majority of Tokyo's commuters

But there's actually one more integral piece to the story, and that is Felica, a special flavor of NFC developed by Sony, and is the tech that makes up the backbone of Suica – [Narrator] And data reading and writing can be carried out in only 01 seconds – Physical Felica smart cards are one thing, but putting it on phones is a whole other Now, the Japanese have been doing contactless payments on mobile phones as far back as 2006, but in typical Sony fashion, putting Felica functionality on a phone involves a proprietary chip, emphasis on proprietary, as well as software that the company codeveloped with Japanese cellular carrier, NTT Docomo

So this not only means that ordinary NFC on most phones here in the west won't fully work with Suica, but say if I decided to be a phone manufacturer tomorrow and wanted to add Suica compatibility, I'd have to write Sony and friends a big fat licensing check The catch 22 here is that while it is a great selling point for consumers, adding Felica to phones generally alienates products to the Japanese market Let's put it this way If a global manufacturer produces phones outside of Japan, why sell a feature that makes a phone more expensive to produce if it's not going to be used a lot? It's effort, resources spent, and a dig to the profit margin if you put features that only appease a relatively small bucket of your potential customers It is precisely for this reason, too, that Google sells exclusive SKUs of the Pixel 3 and 3a to Japan, just to include its Japanese region-specific version of Google Pay that supports Felica

– [Commercial Voice] Google Pay Day – But that is how Apple sees an opportunity On an international scale, starting with the iPhone 8 and iPhone X, and the Apple Watch Series 3, the company put forward the effort and resources to include a universal NFC chip, and developed the software from the ground up that allows for Felica functionality, in addition to the NFC stuff we're already used to As far as mobile payment platforms go, this arguably positions Apple Pay as the most global universal mobile wallet yet, and possibly for the foreseeable future Of course, all of this backstory and context means jack without actual, practical experience to show for it

As a foreigner, adding Suica to your iPhone or Apple Watch is a serious life hack considering how easy it is to do In fact, you don't even have to be in Japan to make one Within Apple Pay, Suica is denoted as a transit card and when you put it in the settings as your express transit card, you don't even have to unlock or wake your Apple Watch or iPhone, you can just go into the station gates and tap and go, you don't have to worry about any of that Additionally, a huge reason as to why Suica is so useful is not only because it gets you to your train quicker, but also, because you can use it for other things Tokyo is an oasis filled with vending machines, convenience stores, and fast food joints to satisfy your simple needs and keep you going

And many of them take Suica, which is especially handy if you're in the mood to simply get in, get out, and go home It's even great for not so every day purchases Here's me using it at the Pokemon Center to buy stuff for Mystery Tech, and even playing games at the arcade And this is not even mentioning that refilling the value on Apple Pay Suica is super easy You can just do it within the interface using a credit card that's already in your Apple Pay wallet

This is way easier than the old fashioned way of dealing with refill kiosks and cash at the train station All this to say that Apple Pay Suica is incredibly lucrative because all of the small impulse purchases it thrives on are ones that can also surprisingly add up So you might be wondering how all of this talk about one Japanese card system is relevant to the rest of the world, apart from it being really, really, cool No, I'm not implying that the Apple Card should be like Suica, or that I think Suica even has a future outside of Japan, as cool as that sounds While I can't speak for how much Suica is doing for Apple Pay itself, I see the pairing playing toward a grander vision for Apple Pay and Apple as a whole

If the name of the game is to prop up hardware businesses with software and services, pouring resources into mobile payment is a no-brainer, by virtue of it encouraging the moving and spending of money, which is something, again, that people do on a daily basis This is exactly why the Apple Card exists And while it might seem like more of a heavy handed move to propel Apple Pay's growth here in the US market, I mostly see it as a pawn, of sorts, in this game of payment chess Sure, it could end up a big success, but it actually feels more like a wake-up call for credit card companies and banks to compete and innovate their own offerings In this regard, at least, the benefits seem to outweigh the downsides

Let's put it this way No matter where I am in the world, it shouldn't be difficult to take my money, especially if I wanna spend it Just take my money And the reality is that Apple Pay continues to make that easier and easier The only thing Apple has to do now is convince the public to experience this for themselves

And if they have their way, Apple Pay will be their secret weapon to selling even more iPhones and Apple Watches

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