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Apple Pay heads to Japan with help from Sony's contactless tech

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Apple's iPhone accounts for half of the Japanese smartphone market.   © Reuters

PALO ALTO, U.S. -- Apple will partner with a Sony unit to bring its smartphone-based payment service to Japan, using the partner's contactless FeliCa technology to piggyback on existing infrastructure.

The U.S. smartphone giant will team with FeliCa Networks to make the iPhone compatible with the technology, likely by adding a feature letting it communicate with FeliCa readers. iPhone users, who account for half of the Japanese smartphone market, will be able to use Apple Pay for contactless payment at convenience stores or vending machines with FeliCa-compatible terminals.

Though the new iPhone being unveiled Wednesday will roll out worldwide this fall, Apple Pay likely will not launch in Japan until next year. Apple still needs to work with retailers and service providers using the readers, as well as negotiate fees with the financial institutions from which payments will be withdrawn. The company plans a gradual rollout of the service across the country.

Users will also be able to store train tickets on their iPhones, letting them enter gates with a wave. Other proposed uses for the technology include integrating membership cards and replacing security key cards. Apple's foray into Japanese smartphone payment services will promote broader adoption of compatible terminals at retailers and event venues. Foreign travelers may be able to use foreign iPhones to make payments as well.

Apple Pay is currently available in countries including the U.S., the U.K. and China. Though the service uses wireless communications technology similar to FeliCa, differing standards prevented its use in Japan. Google parent Alphabet plans to introduce its rival Android Pay service to the country as early as this fall, through a partnership with Mitsubishi UFJ Financial Group.

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