JCB J/Speedy Apple Pay Lands in Taiwan

JCB Apple Pay in Taiwan

JCB announced J/Speedy Apple Pay service for Taiwan today. This means any Taiwanese customers with JCB cards can add them to Apple Pay. More importantly this means all those Japanese tourists that Taiwan has been advertising to can now spend money with Apple Pay JCB cards in Taiwan. In short iOS 11 NFC switching for FeliCa QUICPay at home and EMV J/Speedy in Taiwan.

Who says you can’t have it both ways?

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Contactless Passes and NFC Certificates for iOS 12 and watchOS 5

iOS 12 Apple Pay Wallet and PassKit NFC Certificates

Apple revealed details of NFC improvements coming to iOS 12 and watchOS 5. Contactless Passes for Wallet were announced at the WWDC18 Keynote on June 4. Apple clearly wants to promote Contactless Passes in Wallet over clunky QR Codes and showed a demo of Contactless Passes in action on Apple Watch at the Wembley Stadium contactless ticket gate.

It’s also clear that Apple wants to promote contactless passes on Apple Watch over iPhone: contactless passes were unveiled during the watchOS segment and are gorgeously displayed exclusively on the watchOS 5 page. Student IDs use the new Contactless Passes feature with Assa Abloy and Blackboard working with Apple to make those happen. You might remember Assa Abloy from The Information rumor piece about door locks and ID Passes coming to Wallet.

The most interesting aspect of implementing Contactless Passes in Wallet is the “NFC Certificate” requirement that are issued by Apple to the developer and strictly controlled for security purposes. I have not seen details, but PassKit NFC Certificates were previously covered by NDA and extremely limited. If door locks and ID passes are involved NDA will still be part of the application process, but if Apple is opening up access to more developers NFC Certificates should be the ticket for developers to gain NFC access that was not possible up to now. At least for mere mortals.

It will be fascinating to see what developers do with wider NFC Certificate distribution and what contactless passes/reward cards, and hopefully much more, that come out of it with iOS 12 and watchOS 5.

Market Risks when Problems aren’t Fixed

Transit cards have one job: get the user through the ticket gate quickly and reliably every time, no questions asked. Because they are bullet proof, fast, highly reliable and also used for e-money purchases, transit cards like Suica and Octopus have evolved beyond transit smartcard systems into transit platforms.

A transit platform becomes even more powerful, flexible, essential and transformative when it is deployed on smartphone digital wallet platforms like Apple Pay, Samsung Pay and Google Pay. When economies of scale and masses of moving people with transit card loaded smartphones come together all kinds of exciting new business possibilities and synergies open up: for transit companies, for local area economies, for merchants, for the digital wallet platforms and for customers.

But this can only happen if the basic transit card job and performance on the smartphone matches the plastic one. It has to be as fast and reliable as a plastic transit smartcard every time. It has to be bullet proof. This is essential. When the smartphone transit card performance is not up to the plastic one, people simply don’t use it and stay with plastic or reach for something else. Ask any daily commuter.

The iPhone X Suica Problem
This is exactly what is happening to iPhone X in the Japanese market, perfectly captured in the following tweet of which you can find plenty more. Apple has not fixed the long running iPhone X Suica problem, 7 months and counting, and for customers who depend on Suica iPhone X is a poorly designed piece of expensive junk. A spec problem. The risk of Apple doing nothing has damaged Apple’s brand value in the Japanese market. A small thing can have big implications and Japan is not the only market where this is happening.

Japanese complaints of iPhone X Suica performance
Japanese complaints of iPhone X Suica performance have been constant

Apple Pay≠Apple Pay Transit
The iOS 11.4 update was originally slated to expand Apple Pay Transit cards beyond Beijing and Shanghai to include Jiangsu, Shenzhen, Wuhan and Chongqing but didn’t make the cut. Why not? China Apple Pay Express Transit cards are all the same spec right? The answer is on the Apple Pay Transit page and in Chinese discussion forums: Apple Pay China transit cards are a glitchy unreliable beta product. Chinese smartphones from Huawei, Xiaomi, Oppo don’t have these problems. Transit cards are different from credit cards because the spec is much higher with tight tolerances, they have to work perfectly every time. Apple Pay≠Apple Pay Transit.

Maybe the beefed up Core NFC changes rumored to be coming with iOS 12 will help Apple fix Apple Pay Transit card problems in the long run but fixing the current problems ASAP should be top priority if Apple wants to protect Apple brand value in the China and Japan markets.

Other Risks
This market risk applies not only to smartphone vendors, it applies to transit companies too. Especially those who are switching from fast, reliable ‘closed’ stored value (SV) systems to ‘open’ slow, glitchy EMV contactless.

People think contactless cards are all the same. They are not: a credit card is not a transit card, it’s not yours. Credit cards are subject to the whims and idiosyncrasies of the issuing bank who can deactivate any card at a moments notice without bothering to tell you. This is a problem when using a credit card as a transit card. Singapore transit users are complaining of fried plastic contactless credit cards and of card issuers deactivating cards mid-transit for being over limit. A stored value transit card is yours with your money stored on it. Locally ‘off line’ processed stored value transit cards will always be faster and safer than credit cards because the FeliCa, MIFARE and CEPAS technology behind them was tailored for transit needs.

The risk to transit companies going ‘open loop’ is that every glitch and problem gets blamed on the transit company, never the payment network or credit card company because people have zero expectations for credit card companies and banks. The transit company ‘brand value’ is damaged by the management whims of other companies.

The other downside it that all the exciting business possibilities and synergies of a transit platform + digital wallet are lost. In this case everybody loses: the transit company, transit area merchants, digital platform vendors and most of all, transit customers.

UPDATE: I incorrectly stated that China Express Transit Beijing and Shanghai cards use MIFARE technology. They used to be MIFARE but migrated to something similar to PBOC 2.0 ED/EP and T-Union cards are a further development but the Apple Pay Express Transit flavor is different.

Google Pay Suica Goes Live

Google Pay Suica

As anticipated by Android Police earlier this month Suica has officially launched on Google Pay in Japan. Mobile Suica has been available on the Android platform since 2011 via the Osaifu-Keitai e-wallet service offered by the major Japanese carriers NTT Docomo, KDDI au and Softbank. For Japanese customers on Android, Google Pay offers a limited sub-set of full e-wallet services they already have.

With this rollout all the major stored value “prepaid” e-money cards are now on Google Pay: Suica, WAON, nananco and Rakuten EDY. JCB and JACCS credit card support and the Japanese P2P payments startup Kyash service is promised for later this summer. It’s not clear however what Android devices are supported beyond Only Osaifu-Keitai models from the major JP carriers (for the most part) support Google Pay Japan. As I wrote earlier, FeliCa support on Android devices outside of the Japan market is a complicated story, Google native support of FeliCa has been uneven at best. Support for the major FeliCa payment networks iD and QUICPay is missing.

Hopefully we’ll get a clearer picture in the days and weeks ahead.

UPDATE 1: as suspected, Google Pay Suica requires a Osaifu-Keitai ready smartphone and Android 5. Google is not going to promote or make a Global FeliCa Android answer to the Global FeliCa iPhone. Pixel 2, Android Pay and HCE-F made that clear.

UPDATE 2: looks like Google Pay Suica does not have native support for Suica Commuter Pass creation/renewal or extra functionality that Suica App provides to Apple Pay Suica users, also only a single Suica card per Android device is supported. Mobile Suica app to the rescue.

UPDATE 3: Android users who can’t use Google Pay Suica out of the box are losing their shit

Google Pay Suica does not support Suica Commuter

iOS 11 Apple Pay NFC Switching in Action

It’s interesting being back in America, somehow I envisioned Apple Pay availability being the same as it is in Tokyo. It’s not, at least not in Salt Lake City. The payment terminal infrastructure is pretty creaky too. Those fancy Flight Holdings Incredist payment terminals would be a welcome sight.

It is fun using the iOS 11 Apple Pay NFC switching feature. My Docomo dCARD/Mastercard ‘just works’ for Apple Pay everywhere. How boring, as it should be. It would be nice if it worked that way for everybody everywhere too.

Docomo dCARD Mastercard is Global NFC