Google And Apple Are Getting Into The Digital Payment Market In Japan

Alphabet, the parent of Google, is getting into the digital payments market in Japan, inking a deal with Mitsubishi UFJ Financial Group (MUFG) for its Android Pay platform.

According to a report, which cited a person with knowledge of the matter, the move is designed to get into Japan’s fast-growing digital payments market. As early as this fall, certain Android-based smartphones will be able to use Bank of Tokyo-Mitsubishi UFJ debit cards for transactions via Android Pay.

Another report, citing data from Let’s Talk Payments and the U.K. Cards Association, noted that, since Sept. 2007, Japan’s mobile payments network has expanded greatly. As of May, there were 1.9 million terminals. That compares to the 1.3 million terminals in the U.S. and 320,000 in the U.K. Google’s partnership with MUFG isn’t exclusive, which means the company is free to ink similar Android Pay deals in Japan with other financial companies. Google is also in talks with East Japan Railway, NTT Docomo, Rakuten, JCB and Japanese digital money providers to make their systems work with Android Pay.

The move on the part of Google comes as Apple is reportedly gearing up to create an iPhone feature specifically geared toward the Japanese market. The new feature will enable users to pay for mass transit with their smartphones. A future iPhone will have FeliCa technology, which is a mobile tap-to-pay standard in Japan, built in. With the chip, customers will be able to store their public bus and train passes on their iPhones and tap to pay instead of swiping their card. Apple is reportedly gearing up to launch the new features with its next iPhone models. The transit card feature could be delayed until next year’s models if talks with the Japan-based payment networks break down. The report noted Apple is working on a major redesign of the iPhone for 2017 that could remove the home button from the display.