Farewell FeliCa Octopus, save the last tap for me

During the 2019 Apple Pay Octopus saga one thing was clear: Octopus was living on borrowed time. On the eve of the Apple Pay Octopus launch:

Octopus Cards Limited (OCL) has been slow extending the service to include mobile. Instead of putting early effort into digital wallet support for Apple Pay/Google Pay/Samsung Pay, OCL wasted time and resources developing the niche Mobile SIM product which didn’t pan out. This lag coupled with the rise of AliPay and WeChat Pay QR Code payment empires put enormous pressure on OCL to do something…

With so much traffic and business from the mainland, OCL owner MTR is looking to add QR Code Open Loop transit support (paywalled link)…MTR gates will eventually look like the ones in Guangzhou with PBOC/FeliCa/QR Code readers supporting Octopus, China T-Union, AliPay/WeChat Pay. At which point I say OCL doesn’t have a viable transit platform business anymore.

I hoped the success of Apple Pay Octopus would buy it time, but on August 28 the South China Morning Post published a story where OCL CEO Sunny Cheung says they will join the China T-Union initiative for seamless transit integration between Hong Kong and China. He to goes out of his way a few times in the interview to say how ‘old’ NFC technology is:

Cheung said internet users’ criticism of Octopus being a tech laggard died down in June after people were allowed to add their Octopus account to Apple Wallet on their iPhones. Cheung, who admitted he was stung by the criticism, regarded Octopus’ breakthrough on the iPhone as one of the best times of his stint with the company. “This was one of my biggest challenges,” he said. “The breakthrough helped refresh Octopus’ image even though it is still using NFC technology.”

Hong Kong’s Octopus aims to spread tentacles with contactless card for paying fares in mainland China

Obviously Sunny thinks that QR Codes are cutting edge. He is retiring and doesn’t care about criticism regarding his ineffectual OCL management, or scalping inbound tourists who want to use Apple Pay Octopus.

Hard Reality
China has ruthlessly weeded out MIFARE and FeliCa transit cards and replaced them with the slower PBOC 2.0/3.0 China T-Union standard, aka the supermarket checkout spec. I think Octopus will eventually get the same China T-Union lobotomy.

Doing so means OCL and China transit authorities can replace or retire the Sold Octopus•Lingnan Pass that is plastic only and covers 20 Greater Bay Area cities. Online information is limited but the current Sold Octopus•Lingnan Pass card appears to be 2 separate chips, a NFC-F FeliCa with HKD e-purse and a NFC-A PBOC Lingnan PASS RMB purse. It’s a plastic era solution that cannot work on digital wallets in its current form.

Octopus could be ‘dual mode’: a single card with separate NFC-A/China T-Union RMB purse and NFC-F/Octopus HKD purse. In this scenario Hong Kong Octopus remains on FeliCa while the rest of China gets the benefit of China T-Union with mobile support. Unfortunately OCL would have to create a new dual mode card architecture that works on digital wallets and have somebody design and fabricate IC chips for plastic issue, an expensive undertaking. It would be great if this could happen but I’m not optimistic.

It’s easier and cheaper to create a single protocol China T-Union PBOC 2.0/3.0 card with separate RMB and HKD currency e-purses that works everywhere, and on mobile, for all mainland transit and for mainlander transit in Hong Kong.

There is also the plastic card issue business angle to consider. Read FeliCa Dude’s Octopus on iPhone 7 post paying special attention to the Octopus plastic card issue steps that he outlines. The Hong Kong powers that be would like that profitable franchise sourced locally or in mainland and not from Sony.

We all know ‘one country two systems’ is an illusion and Hong Kong is quickly being force fitted into China. There are no hold outs. It may take a few years, but as MTR transit gates and OCL store readers are gradually replaced with newer models, those readers will all have dual mode FeliCa/PBOC support. And when everything is ready, MTR and OCL will turn off FeliCa. FeliCa based Octopus has had a great run that influenced transit fare system development around the world. Enjoy it while it lasts.

Update

Jason Tjong tweeted that a dual protocol mode T-Union + FeliCa transit Octopus card is in final testing stages. It will be interesting to see the hardware details. Hard to say what it is at this point, Sold Octopus•Lingnan Pass replacement, Greater Bay Area transit card, something else? But a digital wallet version seems unlikely nevertheless.

Octopus is Out of Time

Is this the last time? Just a few thoughts as iOS 13.5 closes in on what hopefully will be a late May delivery, also rumored to be the launch iOS for Apple Pay Octopus. Recent beta test feedback says the minimal system for using Apple Pay Octopus was raised from iOS 13.2 to iOS 13.4.5 (rebranded by Apple to iOS 13.5). Also a new Schedule of Fees and Guidelines is due May 20. The Hong Kong Economic Times eZone site has taken this to mean that both iOS 13.5 and Apple Pay Octopus will launch on the May 20 Octopus Fees and Guideline update day.

The enthusiasm is understandable, but a similar situation happened in December with no launch. In short, hope for the best but don’t get your hopes up. We’ve been down this road before, but time is running out. If Apple Pay Octopus doesn’t launch in the iOS 13.5 timeframe, it’s not launching at all.

There aren’t any technical reasons for the delay; after all the Smart Octopus mobile service on Samsung Pay has been operating since December 2017 with Mobile SIM service before that. I believe it’s a result of the pressure politics facing Hong Kong, pressures both economic and governmental.

Out of Time Octopus
Octopus was the world’s first transit platform business that extended the transit smartcard to include payments and many other services but Octopus Cards Limited (OCL) has been slow extending the service to include mobile. Instead of putting early effort into digital wallet support for Apple Pay/Google Pay/Samsung Pay, OCL wasted time and resources developing the niche Mobile SIM product which really didn’t pan out.

This lag coupled with the rise of AliPay and WeChat Pay QR Code payment empires put enormous pressure on OCL to do something comprehensively mobile which it did with the O! ePay service in early 2019. But it’s not the only pressure: with so much traffic and business from the mainland, OCL owner MTR is looking to add QR Code Open Loop transit support (paywalled link) at some point. There is also the pressure of creating a Greater Bay Area transit card, and pressure from credit cards and banks. Every player wants a piece of the action.

Perhaps MTR gates will eventually look like the ones in Guangzhou with PBOC/FeliCa/QR Code readers supporting Octopus, China T-Union, AliPay/WeChat Pay, perhaps even EMV contactless bank cards:

At which point I say OCL doesn’t have a viable transit platform business anymore. Mainland China dumped the MIFARE based Beijing and Shanghai card architecture for their own slower PBOC 2.3/3.0 China T-Union standard, I don’t think it’s a stretch to see the same thing happening to Hong Kong Octopus at some point.

Supporters will undoubtably point out the technical merits of China using a single transit standard but that’s just a red herring. Smart devices and digital wallets handle all protocols and will continue to incorporate new technologies. The deciding factors will be good old money and politics: is it more profitable to keep Octopus in place or junk it in favor of QR and China T-Union, and who benefits from it all?

Octopus is living on borrowed time. If it doesn’t aggressively expand services on digital wallet platforms, it doesn’t have a future. Apple Pay Suica turned things around for Suica, let’s hope the Apple Pay Octopus launch can do the same for Octopus.


Apple Pay Suica had a huge impact on Mobile Suica use
Modern digital wallets like Apple Pay seamlessly support multiple payment technology protocols

UPDATE: on May 18 at 4:30 PM, an Octopus system glitch temporarily showed an option to add Apple Pay Octopus cards to Wallet to some iOS Octopus app users, but the feature not functional on the Apple Pay Wallet end. The glitch was quickly fixed but this is a sign that a service launch is imminent post glitch rumors say June 2. (Edit: June 2 did turn out to be Apple Pay Octopus launch day)

The Octopus Waiting Game

UPDATE: Apple Pay Octopus launched June 2, latest details here

The release of Apple Pay China T-Union cards this week with the iOS 13.4.1 update was accompanied with a new Apple Pay China transit page that completely rebrands Apple Pay China as a transit experience. Considering the popularity of QR Code use in China and the slow speed of the China T-Union PBOC protocol, it makes sense for Apple to go all in promoting Express Transit: it’s the only real advantage Apple Pay has over QR Code AliPay and WeChat Pay.

The rollout was also accompanied by some Hong Kong anguish and mocking of the Apple Pay Octopus delay that has become a sad joke. Karen Chiu of SCMP drily noted that, “Apple Pay users in Hong Kong are out of luck,” and Octopus Cards Limited is just a big tease. Ouch!

Octopus Cards Limited made a joke but iPhone users are not laughing

There was sarcasm from others as well, best seen in the comments section of a trite lazy MacRumors piece Apple Pay’s Express Transit Feature Now Supported in 275 Chinese Cities that appears mostly lifted from an equally trite Benjamin Mayo 9to5 Mac post, both borrowing from the Karen Chiu piece without giving credit, so lazy that MacRumors used a MTA OMNY transit gate picture for a China transit story.

The comments are golden however and way more interesting than the story post. They illustrate not only frustration with the Apple Pay Octopus delay waiting game, but also note the seismic shift of Hong Kong in 2019:

Still no news for (Apple Pay Octopus) support in Hong Kong

>At least we know they are testing it. It has more to do with delays on stupid Map Transit

>Really can’t wait to use Octopus for Apple Pay Transit in Hong Kong! Its seriously taking them way too long to implement. This feature was rumored for so long and was already leaked before iOS 13 was released last year, yet we still do not have it.

>>They (Apple) are basically neglecting the HK market. Unacceptable to take so long

>>Hong Kong is so behind on this. Octopus Card company is flexing its monopoly power to the fullest extent. They work with Samsung in exclusive deals so Samsung users can use their phone to pay.

>>>Exactly. Totally unacceptable. At one point, I considered switching to Samsung just for this feature. (of course its impossible to climb over the high walls of the apple ecosystem garden, especially iCloud)

Hong Kong has delusions of grandeur because of its status as a place to buy Apple products for mainlanders when they weren’t so readily available on the mainland… as a market nowadays, it isn’t large at all. The focus is rightly on bigger markets.

>Bruh Hong Kong is jewel of the East, so it certainly deserves Apple’s focus on the market. And mainlanders can buy Apple products on the mainland, they are not welcomed in HK.

>>Perhaps in the past… If the various signs of HK fast losing its foothold isn’t obvious, I dunno what else is. Signs of big brands leaving HK, newer brands going direct to China and bypass HK, and months of protests+riots+bombing driving foreigners to rethink or left amidst COVID-19, etc…..

>>Shall see if HK is still relevant after the global COVID-19 is more or less over and as we march straight into a global recession.

Apple Pay’s Express Transit Feature Now Supported in 275 Chinese Cities

Is there any good new out there? The latest rumors now say Apple Pay Octopus will launch in May on iOS 13.4.5 iOS 13.5 that may, or may not be, the iOS release for the rumored iPhone SE (edit: iPhone SE went on sale with iOS 13.4).

The waiting game continues.


Apple Pay Octopus Waiting Game Timeline