Apple Pay Predicted to Account for Half of Mobile Wallet Users by 2020

Must be a slow news day: market research blah coughed up by Juniper Research is mindlessly regurgitated by MacRumors and AppleInsider. Free advertising for Juniper Research, you go Juniper Research.

To save you the trouble of clicking click bait here is a summary, >with comments:

  • Contactless payments will exceed the $1 trillion mark for the first time in 2018, a year earlier than previously anticipated by Juniper.
    >That’s still small
  • “We believe that growth over the next 5 years will continue to be dominated by offerings from the major OEM players.”
  • Contactless card payments are the strongest across Far East & China and Rest of Asia Pacific.
    >Double Duh and ‘Far East’ is a quaint stupid UK expression that should be shot
  • Contactless Ticketing Gains Traction: Beyond in-store payments, the research forecasts rapid growth in contactless ticketing
    >Japanese IC transit card daily transactions (transit & e-money) top 7 million most of it still plastic
  • Juniper forecasts nearly 10 billion mobile contactless ticketing transactions, ie tickets purchased or validated, by 2022, with North America dominating the sector, followed by the Far East & China.
    >Oh boy, here it comes

Back in March I wrote:

One thing is clear: for smartphones more so than it was with plastic smartcards, transit is the golden uptake path for contactless payments but the combination is most successful when a transit platform matches up with a smartphone one.

Credit card companies are falling over each other to leverage EMV contactless to take control of transit ticketing away from transit agencies. It’s a classic “give us your money and we will save you money,” scam. As I have said many times EMV contactless sucks at transit. Singapore transit users are complaining of fried plastic contactless credit cards and of card issuers deactivating cards mid-transit for being over limit. This is the price for letting credit card companies manage transit ticketing.

The real fun will start when transit agencies wake up to discover they sold their souls to the credit card industry: transit agencies don’t decide who and who does not ride, the credit companies do.

Good luck to the New York Subway system as they phase out the trusty Closed Loop MetroCard system for a Frankenstein Open Loop mish-mash of EMV contactless and QR Codes. The dream of a transit payment platform for the great New York Subway remains a pipe dream.

Oh and one more thing, if Apple divorces Apple Watch from iPhone and allows direct Apple Pay card loading, Apple Pay will rule the world.

New York Subway Contactless Gate
Japanese IT Journalist Junya Suzuki photo of new contactless transit gate in New York

Along the O. Winston Link Trail

Since childhood I have always loved O. Winston Link’s photographs and sounds that he captured for his historic Norfolk & Western Railroad project 1955~1960. On a recent trip to Virginia I made time to visit some of the places made famous in his photographs such as Rural Retreat.

The Rural Retreat station was almost lost and only survives because Link made one his most famous images and recordings there on Christmas Eve December 24, 1957, capturing one of the last Class J steam engine passenger trains passing through.

Rural Retreat Railroad Station July 2018
The Rural Retreat station was almost demolished but has been recently restored.

Green Cove is another station that has survived, this one on the former Abington Branch which is now the popular Virginia Creeper Trail. Link’s famous “Maud Bows to the Virginia Creeper” was photographed and recorded there in October 1956. This is how the station looks today, well-preserved by the Buchanan family who own the land and ran the station for generations.

If you have any interest in O. Winston Link’s work a trip to the O. Winston Link Museum and the nearby Virginia Museum of Transportation in Roanoke Virginia is worth a detour. The drive to Green Cove in Damascus Virginia is a long winding one from Roanoke. The steam engines and tracks are long gone but the beauty of the country and the friendliness of the people are just like O. Winston Link found there long ago.

iOS 12 Does Not Fix The iPhone X Suica Problem

Just in case you were hoping for a software fix: iOS 12 does not fix the iPhone X Suica problem and never will. A reader report from Tokyo says it all.

latest public beta (iOS 12 pb3) at least brought the performance on par with iOS 11. I had 5-tone error and immediate OK beep once-twice per two days and that’s it.

Funny thing is, I have been in a few instance where a person in front / behind me had 5-tone error and OK with their X, and I got the same, we looked at each other and gave “oh you have that error too” look.

I saw your exchange guide, a bit too much of a hassle for now, but I might try it before AC+ ends in 2 years.

On par with iOS 11 eh? This is just another confirmation that the iPhone X Suica problem is a hardware issue that affects all iPhone X production for all models manufactured before April 2018. Apple needs to make it easier for users to exchange bad iPhone X units for revision B iPhone X units instead of making them jump through hoops.

For more information please see:
iPhone X Suica Problem Q&A Exchange Guide (English Version)
iPhone X Suica問題Q&A交換ガイド(日本語版)

iPhone X Suica NFC Problem Q&A Exchange Guide

1️⃣ iPhone X Suica NFC Problem Q&A Exchange Guide
2️⃣ iPhone X Suica NFC問題Q&A交換ガイド (Japanese)
3️⃣ Apple Denial and iPhone X Users
4️⃣ iPhone X Suica Problem Index

Q: What is the iPhone X Suica NFC Problem?
A: It’s a iPhone X NFC hardware defect that causes reader errors and double reads on transit gates or store readers on a regular basis: on average 1 out of 3 NFC attempts is an error. See and hear for yourself:

Q: Can it be fixed?
A: The only way to fix it is to get a iPhone X exchange from Apple. The iPhone X production tally below points to a hardware defect affecting all iPhone X units manufactured before April 2018. Apple fixed iPhone X NFC hardware issues and all units manufactured after 2018 production week 15 (April) are free of the problem. I call these NFC defect free units Revision B iPhone X. Rev. B iPhone X units have superior error free NFC performance that is immediately noticeable.

Reader Feedback iPhone X Production Tally*

iPhone X Production Tally 2018-10-6
Reader Feedback iPhone X Production Tally (as of 2018-10-6) : A simple tally of good/bad iPhone X devices and manufacture dates reported by readers to track production switchover from problem iPhone X devices to Revision B iPhone X devices. All iPhone X devices were running iOS 11.x and include both JP and international iPhone X models.

*Week 15 of 2018 appears to be the Revision B iPhone X switchover production period

Q: Is it a big problem?
A: Yahoo Japan and Google Japan Search Suggestions related to the iPhone X Suica problem are highly ranked which indicates many people in Japan regularly search the topic.

Q: Why is it a problem with iPhone X and not iPhone 8?
A:  Both iPhone models use the same NFC chip but the X logic board is considerably more complex than 8. It could be a logic board RF routing issue, an antenna specification problem, an interaction with other components on the device. Only the Apple Engineers who fixed the problem know the answer.

Q: Is this only a problem in Japan?
A: No, readers report iPhone X NFC problems with China Express Transit cards. In America iPhone X users report similar levels of errors and double reads but were unaware of the problem until they saw my posts. I experienced regular errors and double reads with my January 2018 manufacture iPhone X Suica Problem unit using Apple Pay in America, so yes, I believe the NFC problem is an issue with all iPhone X production SKUs before April 2018 regardless of the sales territory.

Q: Why is it that iPhone X users outside of Japan are unaware of the problem?
A: It boils down to using Apple Pay Express Transit. It’s easy to catch the problem in the high performance, high usage Express Transit environment. It’s much harder to catch the problem with low performance EMV regular cash register Apple Pay use.

Q: How do know if I have a problem iPhone X unit?
A: If you use Apple Pay regularly on your iPhone X and experience reader errors and double reads on a regular basis check the manufacture date by pasting your iPhone X serial number here. A manufacture date is before April 2018 indicates a NFC problem iPhone X unit.

Q: How do I exchange my problem iPhone X unit for a Revision B iPhone X?
A: Apple Support does not publicly acknowledge the iPhone X Suica/NFC problem. Getting an exchange takes time, patience and tenacity. Rely on your judgement because exchanging your iPhone X due to NFC performance issues with Apple Support isn’t easy, though it is getting easier to exchange it in Japan.

Apple Support does acknowledge the iPhone X NFC problem internally however, and will issue an exchange based on 2 conditions:

  • A wipe and restore did not fix your iPhone X NFC problem
  • You encountered problems using your iPhone X for Apple Pay Express Transit use in Japan (nationwide) or China (Beijing and Shanghai)
  • From a reader who got an iPhone X exchange in the US: “tell them (Apple Support) to look up the internal support article on their iPad (in the store) that states issues with iPhone X for Transit in Japan and China. They found it in when I went to the Apple store in the US on their iPad.”

If you cannot connect your iPhone X NFC problem use case to Apple Pay Express Transit use in Japan or China, Apple will not likely give you an exchange.

If all goes well Apple Support will setup an exchange either at a Genius Bar or Delivery Exchange Service (Japan). Apple Support will have you test the iPhone X hardware via the built in diagnostics test and tell you the results show no problem. Repeat that you want to exchange your iPhone X anyway. Be sure to check the serial number of the new unit here to confirm it was manufactured after April 2018. If so, all is good.

Note: Apple Support does not always stock international iPhone X models. It’s recommended that you exchange iPhone X in the same country that your device was purchased in.

Q: Since Apple acknowledges the iPhone X NFC problem internally, will Apple issue an exchange program like they did for the iPhone 8 Logic Board Replacement Program?
A: It took Apple 7 months into iPhone X production to fix the NFC defect, 40 million units by my estimate. That’s a lot of iPhone X units to replace. I suspect there were frustrated engineers within Apple who knew what the problem was but were controlled by the marketing spin machine. Apple should be proactive but will not unless there is enough bad press to force the issue. I don’t see that happening.

Updated 2019-5-25

iPhone X Users Outside of Japan Don’t Realize They Have NFC Problems

1️⃣ iPhone X Suica Problem Q&A Exchange Guide
2️⃣ iPhone X Suica問題Q&A交換ガイド (Japanese)
3️⃣ Apple Denial and iPhone X Users
4️⃣ iPhone X Suica Problem Index

As user reports trickle in it’s becoming clear that iPhone X units produced before April 2018 have a NFC hardware issue. iPhone X Apple Pay Suica users have been complaining about it since iPhone X went on sale. Why aren’t iPhone X users outside of Japan complaining about it? It’s all about NFC environment, experience and expectations.

NFC Infrastructure and Experiences
The Japanese NFC transit and payments infrastructure has a long unique history. It’s fast, modern and high performance. Japanese NFC mobile payments and e-money with Suica smart cards started in 2004, Mobile Suica for feature phones followed in 2006 and took off from there. FeliCa based systems like Suica have very fast transaction rated speeds of 200 milliseconds (ms) but are usually faster in service. The point is: Japanese iPhone X users have vast experience and expectations of how high performance NFC should work.

Unfortunately the United States does not have a high performance NFC FeliCa or MIFARE stored value based transit and payments infrastructure on a large transit network the size of Tokyo or Hong Kong. Most Americans don’t have the experience of a Suica or Octopus (transit + e-money) or Oyster smartcard (transit only) to compare Apple Pay with and don’t understand what they are missing: American iPhone X users have zero experience with high performance NFC therefore no expectations of how NFC should work.

NFC Use and Expectations
Apple Pay Suica commuters are super power users who immediately understand that something is wrong with iPhone X Suica: the dreaded iPhone X Suica problem. On a daily commute there are at least 4 gate transits, usually more, plus Suica purchases for lunch, snacks, coffee, etc. Apple Pay Suica commuter plans are limited to the JR East rail network however, so this limits the number of Apple Pay Suica iPhone X super power users to Tokyo.

There are no iPhone X commuter super power users in America. EMV contactless is a slower, lower performance payment technology that was developed for cash registers, not for rapid transit gates but it is the only Apple Pay experience most Americans have. The slow, antiquated American cash register infrastructure is connected with slow, low performance EMV contactless readers. Customer expectations are nonexistent so iPhone X users never realize that reader errors with Apple Pay are not caused by the reader, they are caused by iPhone X. Users have a iPhone X NFC problem but don’t know it.

In my last post I wrote,

Put it this way: with an iPhone X made before April 2018 the second read is always successful, with a Revision B iPhone X the first read is always successful. Which one do you want?

There is one more question that you need to ask yourself: if you didn’t know that your iPhone X device has a NFC problem, is it a problem for you?

If the answer is yes to both questions carefully observe your iPhone X NFC performance, check your iPhone X manufacture date and exchange your iPhone X if it was manufactured before April 2018.