Report: Apple’s Prepping a Payment Feature for Japan While They Axe the Home Button for the 2017 iPhone

A new report by Bloomberg claims that Apple is gearing up to build in FeliCa technology in an upcoming iPhone that will allow users of Japan’s mass transit system to use pay-as-you-go boarding passes to jump on a train and get where they need to be. This means that users will be able to load their passes onto their iPhones via the Wallet app and use them like you’d use a credit card with Apple Pay. The only difference here is that you’ll be using FeliCa (the standard of Japan’s mobile payment system) and not NFC.

Apple Inc. is planning a new iPhone feature for Japan that will enable users to pay for mass-transit rides with their smartphones instead of physical payment cards. A future iPhone will include technology called FeliCa, a mobile tap-to-pay standard in Japan developed by Sony Corp., according to people familiar with the matter.

The FeliCa chip will let customers in Japan store their public bus and train passes on their iPhones. Users would then be able to tap their phones against the entrance scanners instead of using physical cards. While the FeliCa chip is the standard technology underlying the service, there are several different providers of transit payment cards based on the type of transit and areas within Japan.

So why build a feature into the iPhone only Japanese users will be able to take advantage of? Well, according to Bank of Japan, it’s pretty much because of big business. See, there’s apparently 1.9 million FeliCa terminals across Japan which were responsible for about $46 billion of transactions just last year alone. To put that in perspective, there’s around only 1.3 million NFC terminals in the US and just 320,000 in the UK. So obviously, rather just target a smaller market, it makes sense for Apple to jump on the bigger bandwagon.

The Near Field Communication technology powering Apple’s mobile-payments service, Apple Pay, is prevalent in North America, Europe and Australia, but the FeliCa standard dominates Japan with a penetration of 1.9 million payment terminals, according to the Bank of Japan. The terminals handled 4.6 trillion yen ($46 billion) in transactions in 2015. Last year, there were 1.3 million NFC terminals in the U.S. and 320,000 in the U.K., according to research from Let’s Talk Payments and the U.K. Cards Association.

According to Bloomberg, Apple plans to work with a bunch of card providers in Japan who support FeliCa payments.

Apple intends to work with multiple transit card providers, one person said. The major players there include the Suica and Pasmo networks. Theoretically, virtual representations of the transit passes would be stored in the iPhone’s Wallet application, said the person, who asked not be identified because the planning is private. The card companies sell access to transit services both as-needed and via monthly packages.

Don’t think you’ll only be able to pay at mass transits with this new feature, as Bloomberg reports that you’ll also be able to use the feature with a variety of other terminals that support FeliCa, including vending machines, convenience stores, and even for games on the Nintendo Wii U. Of course, this may be incorrect as it’s unclear whether Apple will make this type of payment exclusive to mass transit systems or not, however at least one major financial institution in Japan is currently in talks with the company to make the feature more widely available across multiple locations.

At this point, it’s unclear whether Apple will launch the new payment feature in the next iPhone or the 2017 iPhone as the company is reportedly hoping that talks between partners go quickly so the technology can make its way into this year’s phone. However, if it’s the opposite, we’ll have to wait until September 2017 to see the feature make it’s way into an iPhone.

Speaking of next year’s iPhone, within the same report by Bloomberg, Apple’s also rumored to be ditching the home button entirely. Apparently, the company will be going for a more simple, single-sheet-of-glass look for the front of the 2017 iPhone. This would be one of the biggest design changes of any iPhone in history.

Apple is already at work on a major redesign of the iPhone for 2017 that focuses more heavily on the display by removing the Home button, according to a person familiar with the matter.

The fait of the home button, at this point, is pretty unclear. Ideally, the company would have to make some type of external navigation method so users can navigate back to their home screens easier. Whether software navigation will be the name of the game here or not will depend on how Apple’s team reacts to trying to fill in the missing piece of the iPhone’s puzzle which, at this point, seems to be falling apart ever so slightly.

This year’s iPhone is rumored to replace the home button with a Force Touch-enabled one that doubles as a Touch ID sensor. This may or may not happen this year, however it’s entirely possible we’ll see this feature make its way into next year’s iPhone. In fact, I’d lean toward this rather no home button at all next year since the rumor at hand is pretty sketchy with only one person “familiar with the matter” telling Bloomberg the news.

Nevertheless, we’ll have more on both the FeliCa rumor and home button removal as we draw closer and closer to the launch of the 2016 iPhone and 2017 iPhone. Be sure to stay tuned to MBEDDED for the latest.

Source: Bloomberg