iOS 13 b4 Hong Kong Wallet now mentions ‘Travel Cards’

Apple has not yet officially announced Apple Pay Octopus but the latest iOS 13 beta (developer beta 4/public beta 3) now mentions ‘travel cards’ and ‘public transport’ in the Wallet initial add card screen blurb when the iOS region is set to Hong Kong. You cannot add Octopus yet as that won’t happen until the official release.

No word yet on iPhone 7 and Apple Pay Octopus support, we won’t find out until Apple and OCL announce the officially supported device list, it should be coming soon. Meanwhile FeliCa Dude wrote a very informative Reddit post that definitively covers every facet of iPhone 7 FeliCa support, from Octopus to iOS 13 Core NFC. It’s amazing stuff.

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The Mystery of Apple Pay Octopus and iPhone 7 FeliCa Support

There are a few remaining fuzzy spots in the Apple Pay Octopus saga. The story I broke back in December from trusted sources clearly had a Chinese New Year release target. The story went dark but busted wide open again with the Apple Pay JSON server code leak on June 25 that made it absolutely clear Apple Pay Octopus would finally arrive with iOS 13. Octopus Cards Limited (OCL) had no choice but to issue a premature press release stating ‘Apple Pay Octopus is coming, more details soon’ and nothing else.

Why the delay? It clearly was not the Smart Octopus in Samsung Pay exclusivity window that ended in December 2018. We may never know the whole story but I suspect that iPhone 7 FeliCa support is one reason for the delay, but certainly not the only one.

It makes sense for Apple and OCL to release Octopus that can be used on as many Apple devices as possible, the bigger the potential user footprint, the better. Octopus will work on Apple global NFC devices: iPhone 8/X/Apple Watch 3 and later. The important question is how badly do Apple and OCL want to add iPhone 7/Apple Watch 2 to the supported device list?

I previously wrote that Apple announced iOS 13 Core NFC enhanced tag support (FeliCa, etc.) for (all) iPhone 7 devices and later at WWDC19, but this does not sync with Apple Pay Suica device requirements: Apple is telling developers that all iPhone 7 models are good for NFC Read/Write FeliCa but telling customers that only iPhone 7 JP models are good for NFC card emulation FeliCa.

In a later post I quoted FeliCa Dude:

There are millions of NFC-F phones and devices outside Japan. That is because Type A and FeliCa are core requirements for NFC certification. If a phone supports NFC, it supports FeliCa.
What is required to be compatible with most payment terminals in Japan is an Osaifu-Keitai provisioned secure element: that can be a SWP-enabled SIM card (not available yet), the Mobile FeliCa chipset with embedded SE, or an iPhone 7 provisioned for Osaifu-Keitai.
The international iPhone 7s can do basic FeliCa read/write without encryption, because they embed a FeliCa-capable CLF <contactless frontend>. Apple has chosen not to provision them with Osaifu-Keitai keys, probably to avoid paying royalties to FeliCa Networks for each device.

This sparked some fascinating comments from Twitter user Lukas and, lo and behold, the very FeliCa Dude himself, an unexpected and pleasant surprise:

As always, the Dude delivers. Abide in the Dude, his knowledge and keen insight on all things NFC contactless and FeliCa is without peer. In a nutshell this means that OCL could offer Apple Pay Octopus on all iPhone 7 and Apple Watch Series 2 devices and add them to the Global NFC Apple device list…but will they? If OCL and Apple can supply the necessary keys in the over the air (OTA) iOS 13 release via the in-house Apple FeliCa keys server, all the better. Either way I think we will find out very soon, possibly as a ‘Apple Pay Octopus coming to Hong Kong’ side mention in the Apple Card release press kit.

Now that the FeliCa Dude has checked in, I hope he can find an appropriate outlet, blog or otherwise, to enlighten us, whatever the occasion. He is a far better writer than I will ever be. I’ve learned a lot from his writings, I know a lot of other people can too. The world needs to hear from the FeliCa Dude, not my cheap imitation.


UPDATE
FeliCa Dude has answered and posted the definitive take of iPhone 7 FeliCa support for all things from Octopus to iOS 13 Core NFC. We own him thanks for taking the time to cover all the angles in such detail.

The crucial section: “In my opinion there are only three reasons that Apple should not be able to bring Octopus emulation to iPhone 7:

  • If they are unable to allocate IDm (card unique ID) values to these non-blessed devices because that process is tangled up with FeliCa Networks
  • If they shot themselves in the foot and disabled their ability to interface their secure element to the FeliCa CLF (contactless frontend) in the PN67V on those non-Japanese iPhone 7 devices because they didn’t see Octopus coming.
  • They don’t feel like supporting iPhone 7 at all, not even the Japanese models: each device has a different generation of secure element, and additional development/testing/certification work may be required for them. This is again a combination of what Apple is willing to do and on which hardware platforms OCL is willing to authorize Octopus to be emulated on. It’s nothing to do with FeliCa Networks or Sony.”

Growing the Global NFC Footprint

One of the challenges facing Hong Kong Octopus Card expansion to digital wallet platforms is the fragmented state of Android hardware and the small footprint of Android global NFC devices. There are lots of devices that can do NFC-F because it is required for NFC certification, but there are far fewer global NFC ‘it just works’ devices. As always Reddit user FelicaDude has the definitive explanation:

There are millions of NFC-F phones and devices outside Japan. That is because Type A and FeliCa are core requirements for NFC certification. If a phone supports NFC, it supports FeliCa.
What is required to be compatible with most payment terminals in Japan is an Osaifu-Keitai provisioned secure element: that can be a SWP-enabled SIM card (not available yet), the Mobile FeliCa chipset with embedded SE, or an iPhone 7 provisioned for Osaifu-Keitai.
The international iPhone 7s can do basic FeliCa read/write without encryption, because they embed a FeliCa-capable CLF <contactless frontend>. Apple has chosen not to provision them with Osaifu-Keitai keys, probably to avoid paying royalties to FeliCa Networks for each device.

The good news for iPhone users is that Apple went global NFC with iPhone 8/X/Apple Watch Series 3 and later by implementing the complete FeliCa secure element (SE) package with keys on the Apple A Series and S Series chips. The important thing to remember is that Apple does this without any dedicated FeliCa chip, it is Apple hardware top to bottom. This means that Hong Kong already has a large footprint of Apple devices ready to use Apple Pay Octopus from day one.

The bad news for Android users is that a similar global NFC packaged Android device doesn’t really exist yet. All-in-one off the shelf global NFC chip packages like the NXP PN81 are new to the market, but the standard practice to date has been adding a dedicated FeliCa chip to a smartphone model only in the markets that need it, like Japan.

The Google Pixel 3 has the global NFC ready NXP PN81 but has not used it for FeliCa support, going with a separate hardware model for Japan. The Pixel 4 leaks so far have not offered any NFC information. The success of Pixel 3 in Japan guarantees that at the very least, Google will offer the same deal: a Pixel 4 FeliCa chip model for Japan.

If Google is smart, Pixel 4 will activate and leverage the entire range of PN81 global NFC functions for all models, or have its own embedded secure element on a Google custom chip similar to what Apple has done. Even with that in place, and even if Google Pay Octopus was a reality, the footprint of Octopus ready Android devices in Hong Kong is far smaller than iPhone and Apple Watch.

The global NFC iPhone and Apple Watch footprint means that lots of people in Hong Kong, or visiting Hong Kong can add Octopus to Apple Pay when iOS 13 arrives this fall. I predict 2 things: Apple Pay Octopus will be as successful in Hong Kong as Apple Pay Suica in Japan, and Apple Pay Octopus launch day will experience a similar stamped of online users that nearly brought down Apple Pay Suica iCloud back in 2016. It will be interesting to see what Octopus Cards Limited does with that success and how it grows the global NFC footprint.

UPDATE
FeliCa Dude has answered and posted the definitive take of iPhone 7 FeliCa support for all things from Octopus to iOS 13 Core NFC. We own him thanks for taking the time to cover all the angles in such detail.

While the screen is on: Background Tags and Apple NFC Evolution

Background NFC tags work when the iPhone screen is on

NFC background tag support that allows users to scan NFC tags without an app arrived with A12 Bionic iPhone XS/XR and iOS 12, but the feature is only becoming truly useful with the enhanced NFC tag support in iOS 13 Core NFC. The Japanese and UK governments have already announced ID card NFC tag support for iOS 13, Jennifer Bailey previewed a new NFC tag Apple Pay feature in May, and the iOS 13 Shortcuts app lets users deploy NFC tags to create their own HomeKit automations. These are exciting developments that are just the start of new powerful and innovative NFC services on the Apple platform.

Apple’s strong point is the tight integration of software services across different devices that no other platform can match. Apple Pay Suica works on iPhone and Apple Watch, but the latter combination of technology, function and size makes it a completely different and beguiling experience. Apple Pay on Apple Watch is its own special thing.

A Temporary Split in the NFC Evolution Line?
The evolution of Apple NFC on both iPhone and Apple Watch was in lockstep up until the arrival of A12 Bionic in 2018. The A12 Bionic NFC powered background tag and Express Transit power reserve features only work on iPhone XS/XR. Apple Watch Series 4 does not support these NFC features, nor does watchOS support the Core NFC framework, this means that NFC tag Apple Pay on Apple Watch is out of the question.

Is the feature split temporary or does it represent a different line of NFC evolution for Apple Watch? The absence of Core NFC makes sense because watchOS does not support 3rd party apps, at least not yet. Express Transit power reserve however, would be a great feature to have on Apple Watch as iOS 13/watchOS 6 Apple Pay Express Transit rolls out to Chicago Ventra, Brisbane myki and Hong Kong Octopus.

Getting that feature on Apple Watch depends on how quickly Johny Srouji’s A team can implement the A12 Bionic Secure Enclave design that handles basic Apple Pay transactions directly and bypasses the OS, on the S Series chip. I cannot believe they are not pushing hard to deliver the goods as soon as possible, perhaps even with Apple Watch Series 5 featuring a S5 Bionic chip.

Delivering a S5 Bionic would get Express Transit power reserve on Apple Watch with NFC performance gains as well. It would also give Apple the option to add NFC background tag reading later on as watchOS becomes more powerful and independent.

The iPhone 7 FeliCa Question
There is one fuzzy area of iOS 13 Core NFC and it is iPhone 7 FeliCa support. At WWDC19 Apple announced that all devices, iPhone 7 and above, would support the enhanced NFC tag lineup: NDEF, FeliCa, MIFARE, ISO 7816, ISO 15693, VAS. But this does not match up with Apple’s own device specs for adding a FeliCa Suica card to Apple Pay:

Apple is telling developers that all iPhone 7 models are good for FeliCa but telling customers that only iPhone 7 JP models are good for FeliCa. This means we get one of two scenarios:

  • iOS 13 retroactively adds FeliCa support to all non-JP iPhone 7 models. Apple can do this by adding device specific FeliCa keys as iPhone 7 NFC hardware is the same for all models worldwide.
  • iOS 13 Core NFC FeliCa tags work but non-JP iPhone 7 models (without FeliCa keys) do not work for FeliCa transactions at the terminal.

The latter ‘FeliCa keys vs. No FeliCa keys’ scenario is illustrated in a comment post by Reddit user FelicaDude, if I understand correctly, that without device specific FeliCa keys iPhone 7 only works in basic Read/Write mode without encryption, with FeliCa keys iPhone 7 works in Read/Write encryption mode necessary for local offline processing with payment terminals (i.e. Suica):

The international iPhone 7s can do basic FeliCa read/write without encryption, because they embed a FeliCa-capable CLF <contactless frontend>. Apple has chosen not to provision them with Osaifu-Keitai keys, probably to avoid paying royalties to FeliCa Networks for each device.

FelicaDude Reddit

The initial iOS 13 beta 3 release build (17A5522f) did not support iPhone 7 but the revised build (17A5522g) released yesterday does. I am intrigued that something is going on with iOS 13 and iPhone 7. It’s probably a vain hope that it could be connected with the upcoming Apple Pay Octopus transit card launch which requires a FeliCa capable device, though it does makes sense for Apple to launch the Apple Pay Octopus with a wide footprint of supported devices. Let’s keep fingers crossed that iOS 13 adds full FeliCa support to all iPhone 7 models and transforms them to the global FeliCa iPhone devices they deserve to be.

QR Codes and Big Data

After the 7pay QR Code launch and security meltdown, Twitter is full of Japanese tweets asking ‘why do we need QR when we already have fast secure FeliCa services like Apple Pay Suica?’

It’s a very good question. Finding the reasons behind the manufactured QR Code in Japan mania is not easy. On the surface it looks like a strange retro attempt to replicate the success of AliPay and WeChat Pay in the Japanese market and lower operating costs are certainly part of the allure. A close examination of actual QR use boils down to LinePay and using LinePay points to buy stuff on the Line Store (stickers, coins, etc.).

So why is 7-Eleven aiming to trash their FeliCa nanaco card and push their user base to 7pay QR, and why are all the other convenience store chains doing the same? IT journalist Junya Suzuki, Japan’s top reporter covering all things cashless has posted a great explanation: Big Data.

If you have lived in Japan for any length of time you are probably familiar with the T-Point card. A few years ago Doutor, FamilyMart and many other business were pushing T-Points. Now they are not. Doutor dropped T-Point for Docomo d POINT in June, and the arrival of QR FamiPay is FamilyMart kissing T-Point goodbye.

As Suzuki san points out, from the convenience store point of view, the problem with customers using Suica, nanaco or T-Point is that they don’t have personal data attached to them. Anybody can buy a Suica card at a JR station or a nanaco card at 7-Eleven and use it on the spot. The only piece of data going into the system is the card id#. They can’t get your name, phone, etc. and profile the customer.

With QR Code apps and an account signup/sign in, QR Code platform operators get the information they want to profile customers and plug it into Big Data. The customer ends up being the product. It’s not about offering better service or technology. How useful QR Code payment apps are in the long run, or how much they actually end up being used, is anybody’s guess.

Unfortunately the current messy situation is only going to get worse as Japanese bank QR Code platforms start launching this fall. Smartphone users will have to find their own way through a growing maze of QR payment apps and different UIs, each one vying for attention with campaign booty. The freebie startup campaigns will eventually end, The inevitable consolidation process will be painful. There is no doubt however that the 7pay startup fiasco is a tipping point, the reevaluation process has begun.