iPhones latest feature excites the US, is old news overseas

According to Time.com, the iPhone’s latest functionality is old news across the globe. In Japan, Hong Kong, and Taiwan, people are using their phone to buy things for years. In Hong Kong, residents regularly pay for goods, services, and public transit, all without swiping or signing. Instead, shoppers can simply wave their Octopus card, which uses a technology similar to Apple Pay, at checkout. Octopus Holdings claims 95% of people in Hong Kong between ages 16 to 65 use its product, and Octopus is accepted at 14,000 retail outlets. Also, the card’s swipeless technology has been incorporated into phones and watches. The launch of Octopus in Hong Kong was in 1997.

Apple Pay-like services are also old news in Japan, a country where mobile payments are already ubiquitous. Today, nearly every cell phone sold in Japan (other than the iPhone) comes with mobile payment technology built in by default.

One reason behind America’s stagnation in the mobile payment space is simply the inertia of the credit card system, argues the report. Magnetic stripe cards are accepted by as many as 9 million US businesses, and it will take an enormous investment to make Apple Pay even half as prolific. However, in countries like Taiwan and Kenya, where credit card penetration is low, or Japan, where there is a cultural aversion to debt, new alternatives were given an opportunity to flourish because credit cards had not already dominated the market.

However, as America slowly prepares to move from magnetic strips to near field communication (NFC) systems like Apple Pay, Asia may be held back by its own form of inertia. “Japan and Hong Kong are faced with a dilemma,” says Datamonitor’s Jameson (quoted by Time.com). “If they wish to begin using Apple Pay or other NFC-based mobile payment services, they will need to start from the ground up in building their contactless/mobile payments ecosystem like the rest of the world – which would require considerable investment.” Their other option? “Stick with their existing system while the rest of the world moves in a different direction.”