Good old William S. Burroughs hit the nail on the head explaining what the title of Naked Lunch really meant: that awkward frozen moment when everybody in the restaurant sees exactly what is on their fork. iOS developers staring at the App Store fork don’t like what they see: an Apple platform that’s supposed to be a level playing field, where the reality is that Apple plays favorites and cuts side deals, a losing game of lowering standards.
People far smarter than me already editorialized Tim Cook’s opening statement at the Congressional antitrust hearing. I won’t go into it here except to say, what did they expect? The whole affair, on all sides, media included, was like a bad lip read parody, an awkward Handsome Anthony intro without the humor.
Octopus Cards Limited (OCL) released an iOS Octopus app for tourists last week that perfectly illustrates what’s at stake in Apple’s losing game of lowering standards. 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, the 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 the users to choose another currency which because the default currency for the life of the card. This adds an invisible surcharge over using local currency transitions, 4% or more, which is OCL taking a cut.
This is called forced Dynamic Currency Conversion (DCC) and is a credit card compliance rule 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’ll have the answer Tim Cook didn’t give at the Congressional hearings. Okaaaay?