Octopus Cards Limited (OCL) released an iOS Octopus app for tourists last week that perfectly illustrates what’s at stake when Apple plays loose with some developers for the sake of Apple Pay. The long delayed Apple Pay Octopus launch in June was very successful but OCL shut inbound visitors out by limiting the Apple Pay Octopus service to Hong Kong issue bank payment cards.
This is something that Apple Pay Suica has never done. All Apple Pay cards and iPhone users from around the world are welcome to use Suica. This is why Suica remains the gold standard of what a transit card on mobile should be.
Instead of following the Suica example, OCL took the low road for inbound iPhone users. Octopus Tourist app adds an Octopus card to Apple Pay Wallet with a non-Hong Kong issue card. However the currency charged to the users Apple Pay cannot be in local HKD currency. OCL forces users to choose another currency as the default currency for the life of the card. This adds an invisible surcharge over local currency transactions, 4% or more on average, which is OCL taking their cut.
This is called forced Dynamic Currency Conversion (DCC) and is a credit card compliance violation. Visa, Mastercard and all stipulate that merchants cannot impose any requirements on the cardholder to use a non-local currency. Why OCL is so brazenly breaking these rules, and why Apple is allowing this level of gouging in a major app from a major Apple Pay payment provider is not good at all. As FeliCa Dude says, “Apple should swiftly rebuke this kind of grasping banditry lest it poison their platform.”
If Apple does nothing, I think we have the answer Tim Cook didn’t give at the Congressional hearings, and many more embarrassing awful Handsome Anthony moments to follow. Okaaaay?