It looks like Apple Pay is already really big in Japan

The Apple Pay in Japan launch was just like any other Apple launch as demand exceeded supply

Apple, iPhone, Apple Pay, iOS, Japan, mobile payments
Credit: Apple

Apple has been working furiously to introduce Apple Pay in new territories, and this morning’s Japanese launch appears to be attracting huge interest.

Trains in Tokyo

Apple introduced train fare payments with Apple Pay in Tokyo, Japan today. Interest in using the system was so intense that the Mobile Suica contactless payment system experienced service disruption for a couple of hours as commuters raced to register their Apple Pay device.

[Also read: Here is the future of Apple Pay]

Japan is arguably the world’s most advanced mobile wallet nation. Electronic transactions began long ago in 1999, and their importance increased in intensity dramatically when Japan became one of the world’s most advanced 3G nations early in the Century.

“It’s a shame that systems went down, but it shows just how much user interest there is,” Celent analyst, Eiichiro Yanagawa told Bloomberg, whose weirdly slanted and robotically repeated headline declared the service off to be experiencing a “rocky debut” in Japan. The article itself doesn’t support that statement -- it suggests, if anything, that just like almost every other product, Apple Pay has strained the production system to the point at which demand has exceeded available supply. If this was an iPhone the shops sold out fast.

Positive sign

“We can probably take this as a positive sign,” the analyst said. In fact, user demand is so high Apple Pay and Mobile Suica became the top trending Twitter topics in Tokyo this morning. Mobile Suica said the problems were due to the “large number of attempts to access the service.”

In 2003, Apple’s then QuickTime chief, Frank Casanova, told me, "If the Japanese market is any example of what will happen, it will come across Europe like a tidal wave.”

Four years later, Apple launched the iPhone.

Apple has equipped iPhone 7, iPhone 7 Plus and second generation Apple Watch with Sony FeliCa NFC technology to enable Apple Pay in Japan. That demand for the service was so high as to put systems out suggests Japan will be a bright spot for Apple’s new device sales during tonight’s results announcement.

A 2011 Accenture study claimed that 33 per cent of “active mobile users” in Japan had already used their phones to make payments in the preceding six months, with 47 per cent of them preferring to pay for things this way, compared to 26 per cent in the US and Europe.

“Japan has the most developed contactless infrastructure in the world and customers are already familiar with using their mobiles for contactless services,” Michael Au, regional Gemalto president told Japan Times.

A big month for Apple Pay

The news comes after several weeks of quietly delivered though noteworthy Apple Pay announcements. The service has recently been introduced in New Zealand and Russia, is expected to arrive in Taiwan and Kenya, and is already available in Australia, Canada, Mainland China, France, Hong Kong, Singapore, Switzerland, UK, and the US. The service is reaching new merchants, new banks, and new implementations, such as Intuit’s recent addition of Apple Pay support to QuickBooks. Last month Apple launched Apple Pay on websites, and in future seems likely to enable person-to-person payments through iMessage.

Adoption in the US has been hampered by real and perceived challenges in merchant acceptance, but where it is possible to use the service, Apple’s is the most popular mobile payment service in the US. You should ignore reports that claim weak Apple Pay acceptance that are based on US only data, the US was late to the mobile payment game, and usage patterns there don’t reflect global trends – instead they reflect intransigence among many traditional stakeholders.

In July, Apple confirmed that the number of service users climbed 450 percent year-on-year, and that half of the transaction value is coming from non-US markets. On a global basis, moves to launch Apple Pay in new markets, adoption by new banks, and service support across additional merchants will inevitably drive further growth in the service. “We would like to be a catalyst for taking cash out of the system,” Apple CEO, Tim Cook, told Nikkei recently, when also discussing the company’s plans for AI.

The suggestion that Apple Pay adoption in the world’s most switched-on mobile payments nation on day one has been so rapid as to create a service interruption shows the company is on track with the mobile wallet plans it has been developing since at least 2010. That’s not a bad position to be in.

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