According to rumors, Apple Inc. is planning to introduce a new iPhone 7 feature for Japan that will enable smartphone tap-to-pay feature for subway mass-transit rides instead of physical payment cards.
Japanese iPhones 7 With Built-In FeliCa Chip
According to MacWorld, Apple may build a FeliCa chip into iPhones 7 for the Japanese market, so customers can simply use their mobile phones in front of a payment terminal in order to easily get access to public transit. Because transit cards need to work almost instantaneously, the transaction speed is of key importance.
Apple Pay's relatively fast processing time is still too slow to be implemented as a payment solution for a quick-moving transit system like New York's or Japan's. However, the appropriate solution could be Sony's FeliCa chip that offers a transaction time of just 0.1 seconds.
Sony's FeliCa chip is already the standard for the existing tap-to-pay technology implemented in Japan. At the moment, there are a wide variety of physical transit cards based on this chip. According to insider sources close to the matter, Apple wants the iPhone to represent those cards.
The iOS Wallet app would store these cards just like it already stores user's credit and debit cards used for Apple Pay. Among the biggest transit card providers in Japan are Pasmo and Suica. They both offer monthly commuter passes or pay-as-you-go options.
According to Bloomberg, if the rumors are proved to be true, the FeliCa chip will allow customers in Japan store their public train and bus passes on their iPhones. Then, instead of using physical cards, users would just need to tap their phones against the entrance scanners.
The Near Field Communication technology powering Apple Pay mobile-payments service is prevalent in Australia, North America and Europe. According to the Bank of Japan, the FeliCa standard, with a penetration of 1.9 million payment terminals, dominates Japan.
In the year 2015 alone, the terminals in Japan handled transactions estimated at 4.6 trillion yen ($46 billion). By comparison, according to research from the U.K. Cards Association and Let's Talk Payments, last year there were 320,000 NFC terminals in the U.K. and 1.3 million in the U.S.
