Apple Inc.'s plan to allow Japanese customers to use iPhones to pay for their daily commute underscores the potential for digital payments to grow in a nation where people still prefer to hold cash.
Japanese have for years been using rail passes that double as electronic money cards, which a growing number of retailers now accept for payments. Yet people have tended to restrict e-money purchases to small items, and Japan trails countries including South Korea and Singapore for digital settlements as bank notes remain widespread.
That presents an opportunity for Apple, whose next iPhone in the country may include technology called FeliCa, the mobile tap-to-pay standard developed by Sony Corp. that's in cards such as the Suica and Pasmo rail passes, sources said last week. By tapping Japan's expanding FeliCa infrastructure, Apple could foster growth in e-money usage through its Apple Pay service and entice more people to buy its phones, which are the top sellers here.