Ahh springtime, flowers and the annual Apple Platform Security (APS) update. This year’s version has many Apple Pay housekeeping changes. Previous versions put everything Apple Pay in a single section. In keeping with Apple spinning out iOS 15 Wallet app as a separate identity, Wallet has its own separate section now, covering all the things Jennifer Bailey unveiled at WWDC21: hotel-home-office keys and ID in Wallet. The Apple Pay section adds a new category for Tap to Pay on iPhone with some interesting bits.
The Tap to Pay on iPhone servers manage the setup and provisioning of the payment kernels in the device. The servers also monitor the security of the Tap to Pay on iPhone devices in a manner compatible with to the Contactless Payments on COTS (CPoC) standard from the Payment Card Industry Security Standards Council (PCI SSC) and are PCI DSS compliant.
The Tap to Pay on iPhone server emits decryption keys to the Payment Service Provider after validation of the integrity and authenticity of the data, and after verifying that the card read was within 60 seconds of the card read on the device.
What’s interesting to me is that Tap to Pay on iPhone servers are providing a seamless payment reader experience in the same way that Apple Pay servers provide a seamless pay experience. It just works, from setup to use, the same tight integration allows payment service providers to focus on POS app development and forget about the hardware because Apple Pay takes care of everything. As Junya Suzuki tweeted recently, a lot of payment reader hardware is suddenly junk compared to what iPhone is providing with tight mobile integration and Tap to Pay servers on the backend. Now with Tap to Pay apps on the horizon, good thing that iOS 15 Wallet expanded the secure element max to 16 ain’t it?
Speaking of Wallet, this separate section covers all things “access credential” related (hotel-corporate-home-car-student ID) with App Clips suggested for provisioning multifamily home keys. Transit now includes eMoney cards (or is it e-Money, Apple seems confused about it just like Express Mode vs Express Transit) and IDs in Wallet is covered in detail. There is also an intriguing iOS 15.4 Wallet security tweak:
In iOS 15.4 or later, when a user double-clicks the side button on an iPhone with Face ID or double-clicks the Home button on an iPhone with Touch ID, their passes and access key details aren’t displayed until they authenticate to the device. Either Face ID, Touch ID, or passcode authentication is required before pass specific information including hotel booking details are displayed in Apple Wallet.
It sounds almost exactly what we already do with regular Apple Pay cards. Perhaps keys and passes only show a generic icon and checkmark with Express Mode with the double-click + authentication required for show details…it’s not very clear.
The whole security expert thing reminds me of what my uncle the doctor (who ran a medical research lab at Columbia University) used to say about his disdain for pharmaceutical companies, “They don’t want to cure you, they just want to keep ‘treating’ you with their medicines.” Human nature never changes. The gist is that EMV Express Transit Mode will always be a thorn in Apple Pay’s side because the security is up to the card companies.
The document is worth your time is you have any interest in Apple Pay and Wallet.
Apple Pay First up of course, is Apple Pay. After Jennifer Bailey’s WWDC21 appearance where she announced home keys, hotel keys, office keys and ID for iOS 15 Wallet, and the separate Tap to Pay on iPhone PR announcement release in January, I don’t think Jennifer will be in the WWDC22 keynote. She’s not going to appear just to explain that Apple Pay is not a monopoly, that’s Tim’s job with CEO level pay grade, it’s unlikely she’s doing to appear to just recap details of what’s already been announced.
Bailey’s job is to announce new features, and I don’t think that after the big iOS 15 rollout of new Wallet features and Tap to Pay on iPhone there’s nothing really new. And it’s not her job to announce new frameworks, that’s what the sessions are for. Things that I have been wishing for these past few years such include easier, more open NFC Pass certification process and/or new frameworks for developers to access the secure element for payments or use Tap to Pay on iPhone. There needs to a clearer path for developers who want to use the secure element for payments (Wallet) or iPhone as payment terminal (Tap to Pay on iPhone).
The only possible ‘new’ Apple Pay Wallet feature I can think of is the long in the works Code Payments. It has been lurking in the iOS shadows since iOS 13, so long that Apple legal inserted official mention in a recent Apple Pay & Privacy web page update: “When you make a payment using a QR code pass in Wallet, your device will present a unique code and share that code with the pass provider to prevent fraud.” If Apple Pay delivers native device generated QR code payments without a network connection, just like all Apple Pay cards to date, it would be quite a coup but by itself, but probably not worth a Jennifer Bailey appearance. Other future goodies like passport in Wallet or ID in Wallet for other countires are too far out to mention, at least in the iOS 16 time frame.
Apple Maps The only new Apple Maps feature that suggests itself is AR enhanced ‘Look Around’ indoor maps for stations. That’s the conclusion after examining the current (February ~ May 2022) backpack image collection in Tokyo, Osaka, Kyoto and Nagoya. It is highly focused on stations, and stations such as Shinjuku, Tokyo, Shibuya, Ikebukuro, etc., are mostly underground, surrounded with densely packed extensive maze like malls.
This means Apple image collection in Japan is going indoors for the first time, likely at pre-arranged times when people are scarce. This is hard to do at a place like Shinjuku station as multiple companies collectively manage the entire site (JR East, Odakyu, Keio, Seibu, Tokyo Metropolitan Bureau of Transportation, Tokyo Metro, just to name a few).
Apple needs something new with indoor maps as the current incarnation is inadequate for stations. As Google Maps Live has shown in Tokyo station, AR walking guidance is a good fit for indoor maps that navigate users through intricate, information dense underground station mazes, though Google’s version has its problems. New and improved, AR enhanced “Look Around” style indoor station maps with walking directions that seamlessly guide users from transit gate to final destination would be far more useful than they are now.
Overall, I am not optimistic that Apple Maps in Japan can become a top tier digital map service. The local 3rd party map and transit data suppliers that Apple depends on to make up the bulk of the Japanese service are decidedly not top tier. Old problems remain unfixed. In the case of the main Japanese map data supplier things have deteriorated.
Increment P (IPC) was 100% owned by Pioneer but was sold to Polaris Capital Group in June 2021 with a new CEO (ex Oracle Japan) who quickly changed the name to GeoTechnologies Inc. Under hedge fund Polaris Capital Group led management the company has been busy inflating the number of cushy company director positions, never a good sign, and pushing out shitty ad-ware apps like Torima. The focus is leveraging assets not building them.
Apple’s Japanese map problem can only be fixed by dumping low quality GeoTechnologies for a top quality digital map supplier like Zenrin (the amateurish UK backed Open Street Map effort in Japan is not worth serious consideration) or Apple aggressively mapping Japan themselves. Apple has not pursued either option: the image collection effort in Japan is leisurely and limited, its use remains restricted to Look Around. Until this changes, expect more of the same old fundamental Japanese map problems in iOS 16 and beyond. Apple Maps is a collection of many different service parts. Some evolve and improve, some do not. Let’s hope for a good outcome with the data Apple is collecting for indoor station maps.
Apple Typography TextKit 2 migration WWDC21 saw the unveiling of TextKit 2, the next generation replacement for the 30 year old TextKit, older than QuickDraw GX even, but much less capable. TextKit 2 marked the start of a long term migration with most of TextKit 2 initially ‘opt in’ for compatibility. We’ll find out how much of TextKit 2 will evolve to default on with an ‘opt out’. There are holes to fill too: the iOS side didn’t get all the TextKit 2 features of macOS such as UITextView (multiline text), some of the planned features like NSTextContainer apparently didn’t make the final cut either. We should get a much more complete package at WWDC22. Once the TextKit 2 transition is complete, I wonder if a Core Text reboot is next.
watchOS 9 Express Cards with Power Reserve? Mark Gurman reported that watchOS 9 will have “a new low-power mode that is designed to let its smartwatch run some apps and features without using as much battery life.” While this sounds like Express Cards with Power Reserve (transit cards, student ID, hotel-home-car-office keys) and it might even mimic the iPhone feature to some degree, it will not be the real thing. Power Reserve on iPhone is a special mode where iOS powers down itself down but leaves the lights on for direct secure element NFC transactions. iOS isn’t involved at all.
Real Power Reserve requires an Apple silicon design that supports the hardware feature on Apple Watch, it cannot be added with a simple software upgrade. Until that happens, a new watchOS 9 low-power mode means that watchOS still babysits Express Cards, but anything that gives us better battery life than what we have now is a good thing. We’ll find out later this year if Apple Watch series 8 is the real Power Reserve deal.
Now that the 1st wave of Suica 2 in 1 card launches is complete, it’s a good time to review the ‘State of Suica’. And it’s always interesting to examine the cultural differences too, when it comes to labeling trends as ‘good’ or ‘bad’. Westerners for example invariably say, what’s the point of having so many Suica card flavors? It’s a waste, better to have just one. It’s a classic double standard professing to want but insisting that life should revolve around single kind of credit card. Japanese don’t seem to care much as the culture is adept at ‘振り分け’: this thing for doing this, that thing for doing that. And the region affiliate users getting Suica for the first time seem pretty excited and all Suica varieties work the same for transit and e-Money purchases.
As of now we have the following plastic Suica card flavors beside the regular Suica available at station kiosks: Rinkai Suica, Monorail Suica, Welcome Suica and Suica Light. On the Mobile Suica side we have: Osaifu Keitai, Apple Pay, Google Pay, Fitbit Pay and Garmin Pay, along with branded Mobile Suica for Rakuten Suica and au Suica on Osaifu Keitai and Mizuho Suica on iOS. Last but not least we have 11 new Suica 2 in 1 Region Affiliate Transit cards that are the keystone of JR East’s MaaS strategy.
What exactly are the differences? It comes down to commuter passes or points. For Suica 2 in 1 cards specifically, it is both. This is a small but very important difference. All the other non-regular Suica outside 2 in 1, come with specific features and limitations. Rakuten and KDDI au users can recharge those Suica with those outside point systems but they can’t add commute plans. Welcome Suica expires in 28 days, Rinkai and Monorail Suica exist for commuter passes and nothing else, and so on.
Suica 2 in 1 doesn’t have limitations and does more than any other Suica: it can hold 2 different commuter passes (one from JR East, one from the region affiliate) and it supports 2 different point systems: messy JRE POINT which is an optional account setup manually linked to the Suica card number, and local government subsidized region affiliate transit points which are automatic and stored on the card itself. The only thing the user needs to do is use the appropriate card for transit to earn and use transit point discounts.
In a mobile payment era where everybody is distinguishing themselves with increasingly complex reward point schemes, the simplicity and flexibility of Suica 2 in 1 transit points, think of it as locally processed transit point stored fare, can go places that old Suica cannot. Imagine how many more people would use Suica transit in Tokyo if it came with transit point discounts. There are other 2 in 1 features not yet supported by regular Suica: disabled and elderly transit user discounts. These are coming to Tokyo area plastic issue Suica, and PASMO too, this October though I suspect those won’t come to Mobile Suica until it gets an upgrade.
Mobile FeliCa hasn’t been updated to the next generation ‘Super Suica’ FeliCa SD2 architecture yet, but once updated we should see Suica 2 in 1 on mobile and new Suica features, along with more Suica 2 in 1 Region Affiliate cards. All in all the new Suica 2 in 1 card format tells us where JR East wants to go.
There are some interesting numbers from the JR East FY results. All things transit took a huge hit in FY 2021 from the COVID pandemic, Suica included, but are now recovering though still below pre-covid transaction levels. Another surprise is the popularity of Eki-Net eTickets, a 39% usage rate is not bad for a service that only started in March 2020. One of the smarter things JR East did with Eki-Net eTicket discounts is making them simple and available to all Eki-Net users and credit cards. The JR Central EX system has 2 different Shinkansen eTicket tiers (EX-Press and smartEX) with larger EX discounts limited to select credit cards.
(The) Digital Markets Act will…require companies designated as gatekeepers to ensure effective interoperability with hardware and software features they use themselves in their ecosystems. This includes access to NFC for mobile payments.
Today’s case addresses a conduct by Apple that has been ongoing since Apple Pay was first rolled out in 2015 <sic, 2014 actually>. This conduct may have distorted competition on the mobile wallets market in Europe. It prevented emergence of new and innovative competition that could have challenged Apple.
Both pieces miss important context surrounding the debate however…and with this issue context is all, especially how Apple Pay is playing out in other global markets. Most of what follows I’ve covered in earlier posts but hope to pull the various issues together in one post. Yet again, we kickoff with an updated Apple Pay diagram.
The so called Apple ‘NFC chip’ is not a chip at all but a hardware/software sandwich. The Apple Pay ecosystem described in iOS Security is a collection of tightly integrated polished pieces: Secure Element, Secure Enclave, NFC Controller, Wallet and Apple Pay Servers, all wrapped into a slick, easy to use UI with a final security wall of ‘secure intent’, a double-click side button hot-wired to the Secure Element. This approach has been so successful that people divide mobile payments history into pre-Apple Pay and post-Apple Pay eras.
Apple Pay has a very simple rule: any card that loads a Java Card applet into their embedded secure element (eSE) has to reside in Wallet app. The maximum number depends on how many Java Card applets it can hold at any one time, the previous limit was 12, the iOS 15 Wallet limit is 16 cards. Developers have two ways to access iPhone NFC: 1) Core NFC framework for NFC operations that don’t use the secure element, 2) Secure Element pass certificates for NFC operations that need secure element transactions (payments, keys, ID, passes). Any developer who wants to run applets in the eSE has to apply for a PassKit NFC/Secure Element Pass Certificate. This is covered by NDA but a company called PassKit (not Apple) gives us an idea what Apple’s Secure Element Pass guidelines are:
Apple care a great deal about the user experience. Before granting NFC certificate access they will ensure that you have the necessary hardware, software and capabilities to develop or deploy an ecosystem that is going to deliver an experience consistent with their guidelines.
The end to end user experience, the whole reason behind the success of Apple Pay. But this gatekeeping is what riles banks and financial service providers who want to load their applets into the secure element without the Apple Pay gatekeeping, without the Apple Pay ecosystem and without the Apple Pay commission. They want to do their own transactions with their own app for free. This is what the EU Commission means when Vestager says: “Evidence on our file indicates that some developers did not go ahead with their plans as they were not able to to (sic) reach iPhone users.” It should read: when they were not able to reach iPhone users for free. Either the developer didn’t apply for a Secure Element Pass, didn’t pass the certification process, balked at Apple’s certification conditions, or couldn’t agree on Apple Pay commission rates.
Secure element gatekeeping is not new, it is an essential part of the secure element system:
A Secure Element (SE) is a microprocessor chip which can store sensitive data and run secure apps such as payment. It acts as a vault, protecting what’s inside the SE (applications and data) from malware attacks that are typical in the host (i.e. the device operating system). Secure Elements handle all sorts of applications that are vital to our modern digital lives…
Mobile Payments Here, the Secure Element securely stores card/cardholder data and manages the reading of encrypted data. During a payment transaction it acts like a contactless payment card using industry standard technology to help authorize a transaction. The Secure Element could either be embedded in the phone or embedded in your SIM card.
Lifecycle management It’s crucial that SE-embedded devices are secure throughout their lifecycle. That’s why Secure Elements need to have an end-to-end security strategy. It’s no use developing a robust security solution for a device which becomes obsolete after a period of use. This is why Secured Elements can be updated continuously to counter new threats.
Few people, especially a PayPal or EU Commission vice president, discuss the crucial secure element lifecycle management aspect. It’s not convenient for them to say the secure element ‘gatekeeper’ is responsible for keeping it secure. Far more convenient for their arguments to omit this, portray gatekeeping as unnecessary and gatekeepers as evil. In the end however, Apple has to maintain secure element updates from the various licensed secure element providers (EMV,FeliCa Networks, MIFARE, and so on) if secure payments are going to work at all This is what people who say, ‘it’s my device, we should be able to use NFC how we want,’ do not understand.
People also forget that nothing is free, you get what you pay for. With Apple Pay as gatekeeper, users get simplicity, innovation and feature updates. Simplicity: users get NFC they can use out of the box without Android-like NFC complexity such as secure element positions and obscure express mode settings.
Innovation: Apple Pay has features like Global NFC. iPhone and Apple Watch are the only smart devices that come with FeliCa built in as standard to use in Hong Kong or Japan, while Android limits functionality by market region. It’s astounding that Android, not even Google Pixel Android, has matched this basic functionality yet. We’re seeing more innovation as Ultra Wide Band (UWB) extends Wallet functionality to include ‘Touchless’ car keys and eventually, UWB enhanced automatic card selection as you approach the reader; more helpful than you might think.
Japan is key to understanding what’s really going on in the Apple Pay monopoly debate. Japan was the first market with an established mobile payment platform in place, long before mobile EMV contactless payments took off in Europe. iPhone also has a much larger marketshare in Japan than it does in Europe. It’s a shame people pass up the opportunity to learn from the successes and failures here.
So what’s the EU Committee vision for ‘open NFC’? I think it’s a rehash of the secure element wars when carriers locked mobile payment services to SIM contracts. In 2013 Google incorporated SimplyTapp HCE (Host Card Emulation ‘secure element in the cloud’) technology as a NFC ‘workaround’ to ‘free’ NFC from the evil clutches of mobile carriers. Sound familiar? Android NFC has never been right since.
How little things change, swap ‘evil mobile carriers’ for ‘evil Apple’ and you have the same self serving ‘open’ vs ‘closed’ NFC chip nonsense that people are debating today. FeliCa Dude, the ultimate industry insider who has experienced it all, said it best: ‘It’s all eSE or nothing now.’
And yet we now have Île-de-France Mobilités (IDFM) turning back the clock, circumventing the eSE on NFC equipped Android devices and going all in with HCE for IDFM’s Smart Navigo service for Android. To me this says all you need to know what European priorities are regarding the ‘open NFC’ model: eliminate eSE gatekeepers by forcing the less secure network dependent HCE as a required option. Good luck with that. From a transit perspective, based on Mobile Suica user experiences, I don’t think HCE Smart Navigo will be a smooth ride.
The EU Committee ‘open NFC’ vision might look ideal…to Apple Pay competitors. Regular users however, will have to deal with the ugly reality of multiple NFC apps, multiple NFC secure element modes and clashing updates that cancel out NFC services. Apple Silicon eSE space is limited to 16 cards. If that sounds like a lot now, wait until you have credit cards, transit cards, home, car and office keys and ID installed along with ‘open’ NFC apps wanting their own eSE space too. Services will be squeezed out forcing the user to intervene. If the EU Committee thinks this environment fosters competition and innovation while growing mobile payment use, dream on.
Japanese tech journalist Junya Suzuki has covered NFC mobile payment developments in Europe, America and Japan for over 2 decades. He doesn’t think the EU is playing an even hand here, in his opinion Samsung and Huawei would never face the scrutiny that Apple now faces. In typical European cultural fashion, EU motives pay lip service to fair open markets while playing an underhanded game of chess to make Apple do what EU banking interests want Apple to do. In other words, a double standard.
What does Apple need to do? I’ve always said that Apple needs to make the Secure Element Pass application process as transparent as possible. Keeping the blackbox NDA process as it is now makes Apple Pay a target, increasingly difficult to defend the status quo. Secure Element access on the level of Core NFC is a long shot, the very definition of a secure element means there has to be a developer certification process similar to EMVCo, FeliCa Networks, MIFARE, Calypso Networks Association, etc., that protects the privacy and business interests of all parties. But it would be great if there is a middle way where Apple can securely open things up for iPhone as a digital wallet, and iPhone as a payment terminal. We’ll see if Apple has anything to say about the subject at WWDC22.
It’s interesting parsing app reviews that say ‘this app sucks’. How does it suck and why? As I’ve said before, the overwhelming negative App Store reviews for Suica App are not about the app but about poor network connectivity kills a connectivity critical service app. The poor connectivity is due to a variety of factors: carrier auto-connect and free WiFi or overloaded mobile connections messing with Mobile Suica recharge and other online functions. People assume the WiFi and cellular icons at the top of the phone screen indicate a healthy internet connection, which they decidedly do not.
Most users see Suica App as the software that controls everything Mobile Suica AND iPhone NFC hardware. It does not of course but people dump all blame on Suica App anyway. Fortunately most of what Mobile Suica does is done without an internet connection. The only time it needs one is recharge time with a credit card in Apple Pay Wallet app or Suica App.
Yet all that complaining over online Mobile Suica app services however, tells us something important about mobile internet connections in station areas, on trains and subways: they suck. Despite ubiquitous 4G LTE~5G cellular and WiFi coverage, reliable internet is notoriously fickle in those famously busy Japanese train stations. This is the real reason behind all those ‘this app sucks’ Suica App reviews. Interestingly enough, this is the same performance gripe with the mobile myki system in Victoria. Like Mobile Suica this became a problem because mobile internet connections weren’t up to the job of delivering reliable, trouble free ‘anytime, anywhere’ recharge/top-up, which people tend to do in transit.
Which brings us to Smart Navigo, the Île-de-France Mobilités (IDFM) Paris region transit card for mobile that is going wide on Android smartphones this year. IDFM has spent a lot of time and expense working with Calypso Networks Association (CNA), the transaction tech used for Navigo, to implement the less secure network dependent Calypso HCE ‘cloud’ secure element approach as the default mobile transit tech for Android devices in 2022.
It is very unusual that IDFM chose HCE as their go to mobile strategy on Android when the more secure hardware embedded secure element (eSE) is standard on all smartphone NFC devices these days, and does the job without internet connections. HCE is very different from eSE in that both NFC smartphone and the reader need a connection to talk with a server. HCE was also conceived for leisurely supermarket checkout, not the challenging transit enviroment. How does Calypso HCE compare to the network-less eSE experience? CNA says:
For security reasons, transactions using the personalization key or the load key are not possible through the NFC interface, and must be done with a secure connection to a server.
Only the Calypso debit key is stored in the HCE application for validation on entrance and control during travel, coupled with a mechanism of renewal of the Calypso Serial Number (CSN) to mitigate the risk of fraud : a part of the CSN contains date and time of validity of the debit key which shall be checked by the terminals.
IDFM up against the Android wall of manufacturer indifference It’s too bad IDFM didn’t study Mobile Suica shortcomings, they could have learned a few things. Most certainly they understand HCE shortcomings but chose it anyway. Why? They probably had no choice: it’s highly unlikely IDFM could get Android manufactures to retroactively update eSE for Calypso on countless different Android models. HCE was the only way to rollout Smart Navigo quickly. The Android platform reputation for keeping devices up to date with the latest software is notoriously bad.
If IDFM can convince Android manufacturers, Huawei, Google etc., to pre-load new device eSEs with Calypso, they could have a 2 tier approach: (1) full spec eSE Smart Navigo for Google Pay Pixel, Huawei Pay and so on, (2) limited spec HCE Smart Navigo for regular, i.e. cheap crappy, Android.
Right out of the gate Smart Navigo HCE won’t support power reserve NFC transactions even on Android devices that support it for regular eSE NFC. In total, there are 6 core Smart Navigo features that are internet connection dependent vs 1 Mobile Suica feature. 6 more things to complain about when they don’t work…in other words the Smart Navigo HCE suck index is 6 times greater than Mobile Suica. If Suica App is anything to go by, there are going to be a lot of bad Google Play reviews for the HCE version of the Île-de-France Mobilités App.
iPhone and Apple Watch users can be thankful that Apple Pay Navigo will use eSE (as Samsung Pay Navigo already does), and avoid this mess when the service launches in 2023, matching the Mobile Suica experience, feature for feature.
IDFM launched Smart Navigo HCE that does not support an Express Transit mode. Android users have to wake-unlock-tap to validate…the price of using HCE instead of an embedded secure element (eSE). That IDFM and Calypso went with HCE, despite the downsides and the fact that modern NFC capable smartphones all have eSE as standard, is very interesting and speaks volumes about the state of Android NFC and licensing fee headaches. Assume that Mobile Calypso don’t come pre-installed on smartphone eSEs, unlike EMV, then imagine the nightmare of: (1) dealing with all the Android manufacturers to retroactively update their devices so they are compatible with eSE Navigo (such as currently found on compatible Samsung Pay devices), and (2) getting Google Pay on board. Going the HCE route likely avoided a lengthy messy delay getting Navigo on mobile for the Android masses which is by far the majority in France.
This is exactly the mess that Apple Pay takes care of behind the scenes so users don’t see or deal with any of it. That’s the value of having a gatekeeper, better UI and security encourages users to use NFC payments and Apple Pay use far exceeds any other digital wallet…this is the benefit that Apple Pay delivers to developers. Too bad it’s going away for EU users that the EU is forcing Apple to give up their NFC gatekeeping role, which is very sucky indeed.
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