Express Cards with power reserve reveal Apple global FeliCa strategy

Westerns were a little perplexed in 2016 when Apple unveiled FeliCa Apple Pay but only on the Japanese model iPhone 7 and Apple Watch Series 2. Industry experts assumed that the credit card consortium created EMV contactless standard would conquer everything NFC and that FeliCa was non-standard and headed for oblivion. Why would Apple go to all that trouble if FeliCa was headed for the scrape heap?

In 2017 Apple quietly incorporated global FeliCa into all iPhone 8, iPhone X and Apple Watch Series 3 models. Anybody with those devices could add Suica to Apple Pay and enjoy cutting edge contactless transit and payments while visiting Japan. Global FeliCa is something that Android still hasn’t come up with.

And now in 2018 Apple has added Express Cards with power reserve that work with Apple Pay Transit Express cards in Japan and China, and Student ID Cards in America. The interesting thing is that outside of China, all Express cards with power reserve are FeliCa NFC-F. An unexpected twist in an unexpected story. Blackboard is working with Apple to deliver Contactless Student ID Cards to Duke, Oklahoma, Alabama, John Hopkins and Temple.

What I find fascinating is how Apple lists the new A12 Bionic powered Express Card feature. At first Apple limited mention of Express Cards with reserve power to iPhone XS/XR spec pages in just a few countries but later updated it to pretty much every market (Apple Canada for some reason omits it for XS but lists it for XR, a glitch?). Apple didn’t do that for the 2017 global FeliCa rollout. It only mentioned the feature on their Japan site.

If Express Cards with power reserve can only be used in China, Japan and a few universities in America, why list the feature everywhere? Is it just marketing, or is it something else? I’ll go with something else. Maybe not now, or even this year, but more Express Cards with power reserve for transit and ID cards are coming to more places.

Apple obviously saw more strategic long-term value in adding the FeliCa middleware stack to iOS first rather than MIFARE which powers a lot of transit card systems around the world. TfL Oyster may be big but Suica is Godzilla with e-money attached. Add China Transit into the mix and Apple’s strategy is clear: transaction volume. Apple Pay credit cards recharging all those stored value Express Cards in China, Japan and American universities is what Apple is really after. It’s a well-defined and enriching technology bundle that Apple can spread to other markets and segments, an intriguing mix of transit and higher education.

Apple’s global vision is also unmatched by the competition. Samsung Pay for example isn’t available in Japan simply because Samsung want to make more money selling Galaxy as a JP carrier locked Osaifu-Keitai premium device. The Google Pay Japan flop was also because Google wants to promote Android as a premium JP carrier locked device. Samsung and Google strangle their own children for money and market share.

Apple’s focused long-term strategy and global vision for Apple Pay and all things NFC remains a very intriguing one. I think it’s going to be another interesting year.

Update: a review of iPhone XS Apple Pay Suica Express Cards with power reserve

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