Taiwan EasyCard coming to Japan

This is an interesting development, Bank of the Ryukyus announced support for Taiwan EasyCard (aka Taiwan’s Suica). The press release is a little vague but says this is a co-venture for Bank of the Ryukyus to build….wait for it…another contactless payment platform for Japan. A separate Nikkei article (Japanese) quotes Bank of Ryukyus as having 7000 stores in Okinawa lined up and ready to go by March with a service launch planned in July. The long term plan is extending EasyCard payments beyond Okinawa to other areas in Japan. There is no mention of transit support.

This will be a boon for inbound visitors from Taiwan, especially Samsung Pay users because it will support EasyCard. Apple Pay and Google Pay support of EasyCard is rumored to be coming…”later” which can mean anything, but all 3 digital wallet platforms support the EasyCard MIFARE format. Now that EasyCard is coming to Japan, I wonder if Suica can go to Taiwan, or how about Octopus support in Japan. This kind of mix and match business opportunity is what global NFC smartphones are all about.

And in other Okinawa related good news: inbound Apple Pay Suica users, and other major transit IC cards are finally accepted on the Okinawa Monorail starting March 10.

MTA OMNY Apple Pay Express Transit User Problems

Apple’s decision to offer Apple Pay EMV style Express Transit as a iOS 13 feature when adding cards to Wallet may not have been a good idea after all, especially on the work-in-progress mixed environment that is MTA OMNY. Manual swipe MetroCards will be around for a few years, and with Cubic Transportation running the show it is anybody’s guess when OMNY, the system and the MIFARE MetroCard replacement, will completely in place and running smoothly.

For every tweet saying Express Transit is great, there are plenty of complaints of unwanted OMNY charges because iPhone users didn’t know Express Transit was turned on. The thing is iPhone and Apple Watch have to be damn close for a read. Unless the device is in a pants or coat pocket or wrist that brushes on the OMNY reader, accidental reads can’t happen. Nevertheless Apple would have happier New York City customers keeping EMV Express Transit off by default, and leave default on for the native OMNY transit card, whenever that arrives.

UPDATE: London TfL users are having the same problem

5G Contactless Payments Part 1: Fast QR vs Ultra Wide Band enhanced FeliCa and MIFARE

Payment empire players envision a brave new world of 5G enhanced contactless payment solutions, seen in recent moves by JR East and other major Japanese transit companies to replace expensive legacy mag strip ticketing with lower cost QR Code ticketing. 5G flavored QR Code and ‘Touchless’ Ultra Wide Band (UWB) Mobile FeliCa solutions were also on display at last months Docomo Open House 2020. How can it be that Docomo is developing Ultra Wide Band Mobile FeliCa and QR Code solutions?

The endless push pull of ‘this contactless payment works great for me’ that drives somebody else crazy is endless fascinating. We have more choices than ever: digital wallets, plastic cards, face recognition, NFC, QR Codes, etc. 5G and UWB promise to mix things up even more.

Ultra Wide Band enhanced FeliCa and MIFARE Apple CarKey?
The evolution of EMV, FeliCa, MIFARE and other similar protocols as they transition from plastic smartcards to digital wallets devices opens up opportunities to include other radio technologies like Ultra Wide Band and Bluetooth in addition to NFC. Ultra Wide Band Touchless FeliCa on display at the Docomo Open House was all about cars, not Touchless walkthrough transit gates that will appear in a few years.

Touchless FeliCa makes great sense as a ‘NFC car key’ that utilizes UWB for operation at greater distance and better accuracy when needed. Touchless makes even more sense as a ‘keep phone in pocket’ touchless payment method for drive thru purchases. The addition of UWB into the mix makes smartcard protocols much more useful than just NFC. I would certainly welcome a smartphone UWB powered Touchless FeliCa replacement that ditches the need for automobile ETC cards and readers on Japanese expressways.

How UWB enhanced FeliCa would fit with Apple’s new CarKey feature said to be coming with iOS 13.4 is unknown but iPhone already supports FeliCa. UWB touchless support for iPhone 11 and later models is a logical evolution. Sony and Docomo are developing the technology with NXP which certainly means that MIFARE will also support UWB enhancements. The long history of FeliCa and MIFARE as keycard solution providers is a natural fit with Apple CarKey. NFC is the only protocol that has been discovered in iOS 13.4 beta CarKey framework so far but I would not be surprised if UWB code references turn up at some point.

5G Cloud vs Local Processing
The Docomo Open House also showcased a QR Code transit gate with 200 millisecond (ms) transaction processing but the real star was the speed of 5G. 5G powered cloud processing promises to upend the current advantage of locally processed prepaid stored value cards…cards like Suica.

The basic promise of 5G is that IT system designers finally achieve a nirvana of everywhere, always available, big pipe central processing without wires, the big cloud. The original Suica card design effort back in the 1980’s had to leverage local processing because central processing wasn’t up to the task of handling massive transaction volumes of a Tokyo-Shinjuku-Ikebukuro station at peak rush hour. This is why Suica cards are stored value by design, the FeliCa technology behind the card design delivers 200 ms and faster transaction times for local processing at the transit gate. What happens when 5G promises, in theory, to deliver 200 ms central processing?

Kill mag strip paper tickets first then Suica?
As Junya Suzuki points out in his article ‘Is QR the future of Suica?‘, transit QR Codes on the complex Japanese transit network only need be a unique local passkey with everything else, verification, transaction, etc., done in the 5G cloud. The same concept applies for facial recognition systems where the registered face is the unique local passkey. With the power and speed of 5G, Suzuki san argues that the need for Suica-like local processing falls away. In his scenario all Suica needs to be is a unique passkey that can lose stored value functions.

I understand his point, Suzuki san comes from an IT system background, as a journalist he has covered JP transit payment system developments for a long time. For low traffic stations a Suica-lite 5G cloud based network makes sense and does away with the expensive hard wired transit gates. Just one year ago JR East said they are building a cloud networked Suica to cover all non-Suica areas.

However the old Tokyo-Shinjuku-Ikebukuro station peak rush hour central processing crunch problem remains. I’m not convinced super fast 5G enabled cloud processing is going to solve that problem any better or cheaper than Suica does now, and reliability is a complete unknown. We also have the next generation ‘Super Suica’ format and FeliCa OS coming in the next 12 months, the design goals here include a flexible, modular cloud friendly architecture and lower costs. Next generation Suica coupled with a flexible local processing~cloud processing backend may be a compelling solution that finally delivers a practical inexpensive Suica infrastructure to the little end of the line station which only gets a few trains or buses a day.

New JR East Suica / QR Code transit gate for Takanawa Gateway station

JR East, Hanshin and Osaka Metro are testing QR Codes and facial recognition ID ticketing to replace mag strip paper. As Junya Suzuki points out, mechanical paper ticket transit gates are more expensive to install and maintain than IC transit card gates but the real expense is mag strip paper recycling costs. Mundane but not surprising. The more important long term question is this: do transit companies keep the current more expensive cash base paper ticket fare vs less expensive IC card fare structures in place, or do away with it when QR Codes replace mag strip tickets? I don’t think we’ll see an answer to that question for a few years.

There is no doubt that 5G will enable new payment possibilities, and a lot of debate. But I don’t see 5G cloud completely upending and replacing the need for local processing and stored value cards. Both are evolving, both have their place. It doesn’t have to be, and should not be a one size fits all solution. Each approach has strengths that can be complementary and build a better stronger system.

For me it comes down to one simple thing. My Apple Watch can be buried under multiple sleeve layers but Apple Pay Suica works great going through rush hour transit gates every time. It’s the best argument for UWB enhanced FeliCa and MIFARE touchless transit gates and stored value local processing I can think of. QR can never match that, nor can face recognition…think face masks during an epidemic or pollen season.

In the next installment I hope to explore 5G and the evolution of digital wallets.

Open loop wishful thinking trashes Apple Pay Express Transit reputation

The latest OMNY bump in the road perfectly captures the downside of making contactless credit/debit cards a one size fits all solution. As the New York Post piece (via MacRumors) points out, some Apple Pay Express Transit users are being double charged for fares. Perhaps they didn’t know that Express Transit was enabled in the first place, perhaps the iPhone passed too close to the OMNY transit gate reader. It’s a classic “you’re holding it wrong” situation that has nothing to do with Apple Pay Express Transit and everything to do with the current EMV architecture and how banks implement it.

Part of the problem is that OMNY is new, it’s not working across the entire MTA system yet, and open loop EMV bank cards will never replace all classic MetroCard fare options. That job is for the MIFARE based OMNY transit card due in late 2021. Until the system is complete Metro users will have to juggle different cards and deal with a very long transition. Transport for London (TfL) users have had MIFARE based Oyster cards since 2003, contactless credit/debit cards have been ubiquitous since the 2012 London Olympics when open loop was added to the TfL Oyster fare system.

To Biometric or not Biometric?
Open Loop credit/debit cards on transit gates instead of native transit cards always come with banking and credit industry baggage. Even in the contactless card heaven that is said to be London, there are a surprisingly number of gotchas: minimum limits for using cards, max limits that require PIN codes. It’s an endless loop of banks pushing one way and merchants pushing back.

The golden uptake for Apple Pay in Japan was Suica and is the same story everywhere: it’s all about getting rid of coins for transit, coffee, sandwiches, etc. The small stuff. This is the 20,000 JPY prepaid heavenly region where Apple Pay Suica sings and banks so desperately want to shut out all other players and keep all the marbles. But bank cards have an authorization problem: banks set spending limits not the card architecture. The line is always changing, what works today might not work tomorrow. The prepaid Suica architecture itself is the firewall that does away with user authorization because local processing transaction at the transit gate or store reader is all the authorization necessary.

Express Transit was developed for Apple Pay Suica in 2016, it remains the best matchup because the feature is a basic part of the Suica card architecture that is not a bank card. Apple Pay Express Transit for EMV payment cards that appeared with iOS 12.3 is a retrofit job that I predicted would have problems because retrofits are about dealing with baggage, not creating a better long term solution. 7 months later we are already there. This problem isn’t going away, not as long as banks and EMV keep operating the way that they do.

Coming later this year attractions that didn’t make it, and one that did

Now that Apple is in full holiday season vacation mode, here is one last look at some promised ‘coming later this year’ services that didn’t make it (and a last minute one that did).

Apple Maps 2.0 USA
The highly detailed Apple Maps 2.0 remake was first announced in mid 2018 with a rollout to be in place for the United States by the end of 2019. The West Coast and Upper East Coast made the cut but half of Mississippi, the rest of the Southeast and most of the Central US are still missing (look for the green). This is not a good sign that Apple can deliver on their promise of providing better map services in Japan before the Tokyo Olympics.

UPDATE: A few hours after posting, MacRumours reports Apple Maps 2.0 data rolling out to all Southeast and Central areas following reports from Justin O’Beirne of beta testing earlier this month. I do not see updated map details from Japan yet but it will take time to show up on devices worldwide. Apple cut it close but kudos for keeping their 2019 delivery promise with 4 days to spare.

Apple Pay Ventra
The native Chicago Ventra transit card on Apple Pay is a big deal that was announced back in March. It represents the first major native transit card for the USA on Apple Pay. The much smaller Portland transit system HOP card landed safely in Wallet in May, but Ventra is still listed as ‘coming soon.’ The fault is not with Apple but with Cubic Transportation Systems who operate transit fare systems for Ventra, New York OMNY, Transport for London (TfL) Oyster, Sydney Opal, Washington DC Metro, and many more. For all of their supposed system expertise, Cubic was extremely slow rolling out Apple Pay Express Transit on TfL and has yet to deliver a single native transit card on Apple Pay or Google Pay. I hope Cubic does a better job in 2020.

Apple Pay Octopus
The Apple Pay Octopus ‘now you see it, now you don’t’ saga of 2019 was strange and ultimately sad. The Apple support side was all ready to roll with iOS 13. Octopus Cards Limited announced Apple Pay support back in July with ‘coming soon’ website artwork that was pulled when the launch was officially delayed on December 19. My take is that OCL parent Hong Kong MTR made, or was forced into, a political decision to limit services, starting with the unexplained service outage of Smart Octopus during the Hong Kong Polytechnic University siege. This is not a popular opinion.

Readers have reported riot damage to MTR infrastructure and suggest this might be a reason for the Apple Pay Octopus delay. I don’t buy it. Hong Kong MTR, or someone higher up, wants to limit services and control movement, not open them up. But this introduces great risk: moving people are moving money. Limit services and the flow of people, and you limit the flow of money. In this scenario Hong Kong doesn’t have a future. More than anything, I hope Hong Kong gets it’s future back in 2020.