Apple Pay Express Transit arrived on the Transport for London system over the weekend, some 6 months after it was announced. The other 2 remaining Apple Pay Transit cards announced for later this year are Chicago Ventra and Hong Kong Octopus. I already wrote about Octopus not launching this year. The Ventra odds seem a little better. On the bright side Ventra is run by Cubic, the same folks who operate the TfL and New York OMNY systems and already have EMV Apple Pay Express Transit support up and running. Also the Ventra Chicago Twitter account did mention Apple Pay Ventra as ‘coming later this year’ in a Nov 30 tweet.
On the not so bright side, Apple Pay Ventra is the native MIFARE transit card, the first native transit card that Cubic has ported to a digital wallet and a big complicated transit system at that. Nevertheless, Ventra is telling users that Apple Pay is coming this year. Let’s hope for a successful 2019 launch in the next few weeks.
As I have pointed out countless times on this blog, Apple Pay Suica is one of the best Apple Pay services that Apple has hosted on its platform so far. The first transit card on Apple Pay remains the best: it combines the speed of the Suica transit card FeliCa architecture, the convenience of the Mobile Suica cloud, and the flexibility of the Apple Pay recharge backend.
This last point is under appreciated. The deal Apple and JR East worked out is the secret sauce: Apple Pay cards in Wallet just work for recharge, from Japan or from abroad, with no extra fees across the board, users earn points for the card of their choice. And users still have the option to recharge with cash if they want to.
Toyota Wallet is built using the PAYCIERGE platform from TIS. The user has a choice between payment with QR/Bar Code in the Toyota Wallet app with Origami Pay or Bank Pay accounts, or payment with a dual mode EMV/FeliCa iD Mastercard prepaid card in Wallet with the backend recharge hosted from Toyota Wallet.
An interesting side note here is that both PayPay and Line Pay have said that FeliCa cards are a possibility. Up until now this has just been lip service. It would be a welcome development if the Line Pay/Yahoo Japan merger produces a FeliCa/EMV dual mode payment option similar to what Toyota Wallet has done.
Toyota Wallet is still not open in the way that Apple Pay Suica is. All of the ‘recharge’ methods are in the SMBC orbit, even iD recharge credit cards have to be SMBC issue (such as Docomo dCard) Visa or Mastercard to avoid hefty recharge fees. It’s not perfect and remains chained to the SMBC financial ecosystem, but Toyota Wallet does point a way forward that I hope Toyota Finance Corp. continues to improve, and that other payment system operators follow.
Summary The Toyota Wallet flexible backend/flexible frontend development is a step forward for digital wallet possibility. This is the first Japanese wallet app where the frontend technology is a simple user choice, not a straitjacket. It shows the innovation possible in Japanese payments market where the focus is on creative thinking. That this kind of innovation comes first on the Apple Pay platform says all you need to know about Apple Pay being open. Compare this approach to the Europe one where the focus is forcing others to solve problems that Europeans should be solving themselves. That approach is a political one, not an innovative solution, or progress.
In a classic, ‘isn’t this how it was supposed to work all along?’ fumble, Docomo is finally doing the right thing by merging the ‘rush rush we have a QR Code payment app too’ dHarai app into a rebranded dHarai iD with, eventually, better Apple Pay/Google Pay iD integration. The first step today is the refreshed Android iD add that merges the Android only dMini card into dHarai (iD). An updated iOS dHarai app will be coming later along with other merged functions.
This announcement would have made a much bigger splash a year ago, but with the Line Pay Yahoo Japan merger taking up everybody’s attention now, it feels like Docomo is fixing a mistake in reaction to the merger, which it is not. In the current Japan cashless payments market frenzy, timing and smart execution is everything, just ask 7pay.
The German law to force Apple to open it’s “NFC chip” is a confusing one. Why does an EU country with one of the lowest cashless usage rates single out one company’s NFC product in a last minute rider to an anti-money laundering bill? That’s not banking policy, it is politics. Details are few but let’s take a look at what it could mean because when it comes to NFC technology, details are everything.
Background stuff The so called Apple ‘NFC chip’ is not a chip at all but a hardware/software sandwich. The Apple Pay ecosystem as described in iOS Security 12.3 is composed of: Secure Element, NFC Controller, Wallet, Secure Enclave and Apple Pay Servers. On one end is the NFC chip controller front end that handles NFC A-B-F communication but does not process transactions, on the other end there is the Secure Enclave that oversees things by authorizing transactions. The fun stuff happens in the Secure Element middle where the EMV/FeliCa/MIFARE/PBOC transaction technologies perform their magic with Java Card applets.
The A/S Series Secure Enclave and Secure Element are the black box areas of Apple Pay. The iOS Security 12.3 documentation suggests the Secure Element is a separate chip, but Apple’s custom implementation of the FeliCa Secure Element, and the apparent ability of Apple to update Secure Element applets to support new services like MIFARE in iOS 12 suggests something else, but it is anybody’s guess. Apple would like to keep it that way.
So what does ‘open NFC’ really mean? It’s helpful to look at the issue from the 3 NFC modes: Card Emulation, Read/Write, Peer to Peer.
Peer to Peer Apple has never used NFC Peer to Peer and I don’t think this is a consideration in the ‘open NFC’ debate.
Card Emulation Apple limits NFC Card Emulation to Apple Pay Wallet with NDA PASSKit NFC Certificates. This is what the ‘open NFC’ debate is all about. I imagine that German banks and other players want to bypass the PASSKit NFC Certificate controlled Apple Pay ecosystem. Instead, they want open access to the parts they want, like Secure Element, NFC Controller, Secure Enclave, and ignore the parts they don’t want like Wallet and Apple Pay Servers. They want the right to pick and choose.
The success of Apple Pay has been founded on the ease of use and high level of integration from a massive investment in the A/S Series Secure Enclave and other in-house implementations such as global FeliCa, etc. Outside players forcing Apple to open up the Apple Pay ecosystem represent not only a security risk to Apple but also a reduced return on investment. One commentator on MacRumors said it’s like Apple took the time and expense to build a first class restaurant and outsiders are demanding the right to use Apple’s kitchen to cook their own food to serve their own customers in Apple’s restaurant. It’s a fair analogy.
The NDA PASSKit NFC Certificate gate entrance rubs bank players the wrong way as they are used to giving terms, not accepting them. The Swiss TWINT banking and payment app for example is a QR Code based Wallet replacement that wanted the ability to switch NFC off, and got it.
My own WWDC19 Apple Pay Wish List did include a wish for easier NFC Card Emulation, but nothing appeared. It’s certainly in Apple’s best interest to make it as easy as possible for 3rd party developers to add reward cards, passes, ID cards, transit cards, etc. to Wallet. However given that the EU is hardly what I call a level playing field, the fact that bank players and politics go hand in hand in every nation, and the fact we don’t know the technical details of what the German law is asking Apple to do, all we can do is guess. In general, I think Europe will be a long rough ride for Apple Pay. At least until EU bank players get deals they are happy with.
Now eMarketer is saying the same thing: “Apple Pay has benefited from the spread of new point-of-sale (POS) systems that work with the NFC signals Apple Pay runs on.” That work with the NFC signals Apple Pay runs on?! It sounds like eMarketer isn’t exactly sure what NFC is. Why not just say Apple Pay has benefited from the spread of new point of sale (POS) systems that work, yes, actually work now dammit! No more “you’re holding wrong” nonsense.
Duh. Is it just me or does the entire Apple tech news scene fail to see how poorly written and shoddy both eMarketer reports are? They are clickbait disguised as market research, nothing more.