EMV Express Transit Option Returns in iOS 12.4 Public beta 4

The temporary absence of EMV Express Transit in iOS 12.4 betas 1~3 has ended, the option has finally returned in iOS 12.4 public beta 4 (16G5046d). OMNY users in New York can use the beta for transit now, but since OMNY itself is one big beta system why bother with beta on beta? I think it’s better to wait for the official release. Portland HOP iPhone users need not bother as they can put real HOP card in Wallet. It’s way better than using a credit card, faster and cheaper too.

The only question remaining is, what kind of Wallet grunt work were they up that they had to remove EMV Express Transit temporarily in the first place?

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Contactless Payment Turf Wars: Apple Card and the Prepaid Innovation of Apple Pay Suica

The Apple Card tag line says it all, “A new kind of credit card. Created by Apple, not a bank.” This is a bank card that’s not a bank card, except that it is a bank card with basic limitations that can never be changed: a bank card is postpay and this chains it to the creaky banking industry that everybody knows and loathes, with predatory fees, credit checks and service nonsense.

To overcome this limitation, and the slow uptake of EMV Apple Pay and Apple Cash, Apple is merging the postpay Apple Card and the prepaid Apple Cash, glued together with Apple Pay into one service. Two is better than one, right? This merge of postpay + prepaid is a long overdue development for the American market that builds on ideas and experience that Apple gained from Apple Pay Suica in Japan.

The credit card drag on Apple Pay adoption
The slow uptake of Apple Pay and other digital wallets in the USA is pointed out from time to time. The eMarketer blog piece in May 2018 predicted stronger growth for In-App loyalty prepaid cards like Starbucks, over Apple Pay and Google Pay. The Starbucks card is like many prepaid loyalty cards that offer points and rewards along with apps that let users add the loyalty card and attach a credit card for easy In-App reloads. It’s an easy entry point for customers to enjoy the benefits of using prepaid cards and get the most out of their purchases.

There are other factors cited for slow Apple Pay adoption rates in America, but I think the basic reasons are simple. During my 4 month American stay in 2018, I was surprised how slow and uneven the Apple Pay experience was at checkout. Pulling out a plain old credit card was often the faster hassle free choice. Either way it’s the same credit card right? It’s marginally move convenient, but not a new service.

That is the problem. Apple Pay and digital wallets are new technology but bank cards carry the combined weight of a creaky, out of date banking industry. Banks operations are retro, analog businesses living in the digital age on borrowed time. Bank cards with all kinds of new technology attached to them are still the same stodgy card services from the same stodgy banks.

The real point of the eMarketer piece is that In-App prepaid cards with postpay credit cards attached on the backend, offer customers a convenient new merged service that is than far better than either by itself, with bank cards limited to a indirect backup role. The prepaid card is the main point of contact between the customer and merchant, not the bank card. And this makes all the difference because it’s where the innovation is.


Japan Transit IC eMoney Transactions for non-transit purchases topped 8 million a day in April 2019

Apple Pay Japan success built with prepaid
Prepaid card use for transit and purchases in Japan dwarfs credit card use, especially with younger people. The major prepaid cards include WAON, nanaco, Rakuten Edy and Japan Transit IC cards (an interesting bit of history is that Suica and WAON were initially conceived to be a single card). Of these the Japan Transit IC card standard occupies a very special category, 255 transit companies form a common interoperability standard which includes Suica. There are more issued Transit IC cards than people in Japan, everybody has one.

File:ICCard Connection en.svg
Japan Transit IC Map, a very cool animated timeline is also available

The core group of 9 major cards (Suica, PASMO, ICOCA, TOICA, Kitaka, manaca, SUGOCA, nimoca, HAYAKEN) also share a common prepaid purse: Transit IC eMoney. The national coverage and scale of the major cards transforms Transit IC eMoney into something special found nowhere else: a de facto national prepaid card standard.

Transit IC eMoney transactions for non-transit purchases topped 8 million a day in April 2019. At current growth rates, transactions should be more than 10 million a day when Super Suica arrives in April 2021 and significantly enlarges the common eMoney purse footprint while unifying it.

The success of Apple Pay in Japan is very different from any other country: it was not accomplished with bank cards, it was accomplished with the Suica transit card with it’s common prepaid Transit IC eMoney purse. The success formula has 2 basic ingredients: de facto national prepaid purse for transit and purchases matched with Apple Pay postpaid bank cards for recharging Suica. Prepaid + Postpay as one service with bank cards limited to the backend for reloading.

The concept is just like In-App prepaid loyalty cards: a prepaid front end with a flexible open ended postpay backend. But this one is much more powerful because it can be used everywhere for transit and purchases. Putting the Suica prepaid card on Apple Pay and Google Pay with their infinitely flexible postpay backend for instant, anywhere, anytime recharge and reloads takes everything to a whole new level of convenience and use.

One of the failures of Apple Cash is that the current version is pigeonholed as a peer to peer service. How different Apple Cash would be if it was positioned like Suica. Apple Pay HOP users are just getting their first taste of new things now, as will Chicago Ventra users when Apple Pay Ventra launches later this year. Unfortunately eMoney is not part of the mix for HOP and Ventra, only transit, nor are they compatible with each other.

A first step towards virtual currency?
I used Suica before Apple Pay arrived and have nearly 3 years of Apple Pay Suica use under my belt. The prepaid + postpay service model matched with transit + purchase eMoney is a combination that is almost impossible to describe to a person who has not lived with it. The daily experience is very different from using bank cards which feel like hard money wrapped in plastic. Hong Kong Octopus card users are probably the only ones who can relate to it, and then only Smart Octopus in Samsung Pay users.

Suica eMoney on digital wallets represents a small step towards virtual currency in a way that bank cards do not. QR Codes serve the same function for China, the first small step away from hard cash. Even though QR Codes payment systems are usually hard wired to bank accounts, they are not run by banks.

None of these schemes are real virtual currencies of course, but they are an important cushion for the mind. The daily use experience prepares people for a future where payments, and the whole infrastructure supporting them, will be completely different from what we have now. It changes old habits, and more importantly, old ways of thinking, just a little. Taking the next step from there is much easier.

A few days ago I wrote:

The Apple Card rollout due this summer is a head scratcher. There are lots of things Apple Card can do in Wallet that other cards, as yet, cannot do. It feels too big and important for just a press release and a new web page. And yet, by itself, it’s too small for a full blown Apple event. I think the Apple Card rollout is going to be a very interesting release for all things Apple Pay.

The new Apple Card + Apple Cash will be the first major postpay + prepaid Apple Pay service for iPhone users in America. The experiment will be fascinating to watch, but Japan remains the world’s most exciting and heady payments market experiment there is.

Thoughts on iOS 13 Apple Pay Express Transit

The iOS 12 release in September 2018 was a rough one for Apple Pay Suica users. It brought new problems like random gate errors, and left old problems, like unresponsive Suica Recharge and Suica balance not updating, unfixed. Everyone experienced problems, everyone except A12 Bionic iPhone XS and iPhone XR users, that is.

iOS 12 was especially tough on Revision B iPhone X Suica users. They had suffered from the iPhone X NFC Suica problem, had finally gotten a NFC error free Rev. B iPhone that worked great on iOS 11. The sudden experience of plunging back to error filled square one was a cruel twist of fate that left them confused and upset.

iOS 12.3 fixed everything for everyone, with trouble free wicked fast Apple Pay Suica performance. It is the best Apple Pay Express Transit iOS that Apple has ever delivered. However, Rev. B iPhone X owners are still worried. One owner told me, “I think that I’ll have the same problem all over again with iOS 13.”

This is a perfectly understandable concern, but I’m going to let you in on a little secret: if you are using iOS 12.3, you are already using iOS 13 Apple Pay Wallet. Apple simply has not told you yet.

iOS 12.3 Apple Pay Wallet is a whole new thing. The changes Apple made to it in iOS 12.2~iOS 12.3 are massive. Express Transit performance gains, and the new EMV Express Transit option are equally massive. Most people assume that the Wallet changes are for Apple Card, which they are, but few people understand that the changes are also for the Apple Pay Transit support of HOP, Ventra, NY MTA, and more, which Tim Cook announced along with Apple Card on March 25.

In short, Rev. B iPhone X users, and all iPhone users, have nothing to worry about anymore. If your Apple Pay Suica or Apple Pay HOP is working great on iOS 12.3, it’s going to work great on iOS 13 too.

Express Transit Tips for Apple Pay Users

Apple Pay HOP card launched on Portland TriMet today, the first transit system in America that supports Apple Pay Express Transit. Express Transit is coming soon to New York OMNY and Chicago Ventra, here are some Express Transit card tips and other things for Apple Pay Wallet users that I have learned from 2 years of daily Express Transit Suica use.

  • Express Transit only works while Face ID/Touch ID is active. Express Transit stops working when Face ID/Touch ID is disabled. It is easy to disable Face ID without realizing it, resulting in a rude passcode request at the transit gate. iPhone X, XS, XR users need to be extra careful if wearing a face mask during a commute, 5 misreads disable Face ID, or putting the device in a fairly tight pants pocket as pressure on the side buttons also disables Face ID. iPhone X, XS, XR users can avoid these issues by turning off Raise to Wake. If you still have problems the last resort is turning off Face ID for unlocking iPhone, be sure leave it on for Apple Pay.
  • Express Transit works great on Apple Watch, depending on which wrist you use, but in winter when wearing layers of clothes, iPhone is faster to whip out at the gate. iPhone is also free from ‘left wrist vs. right side’ gate reader issues. As one reader points out: “Apple Watch works great for Express Transit except it’s on the wrong wrist in many cities. I’m a broken record at this point but a smart band would be a terrific addition to the lineup (and would solve this problem).” Adding money/reload/recharge to HOP and Suica transit cards with Apple Pay on Apple Watch is also much less convenient than iPhone.
  • iPhone X users need to be aware of the iPhone X NFC problem which can cause endless gate errors with Express Transit. You may need Apple to replace it, never an easy thing.
  • iPhone XS/XR users can finally put the Express Cards with power reserve feature to good use, it is cool and assuring knowing that you have 5 hours of reserve power to clear the final destination gate.

Enjoy Express Transit on Apple Pay and happy travels.

“first time in America”

Apple Pay Express Transit Comes to America with HOP and Ventra

(Note: Apple Pay HOP launched on Portland TriMet May 21, details below)

The October 2016 launch of Apple Pay Suica in Japan was an important one with several ‘firsts’: FeliCa (the Ferrari of NFC) was the first non-EMV contactless payment NFC technology on Apple Pay, it was the first appearance of Express Transit cards on a digital wallet platform from outside of Japan that worked without Touch ID/Face ID and supported the full feature set (commuter passes, etc.) of regular plastic Suica smartcards.

The success of Suica on Apple Pay remains the fullest expression and gold standard of what a virtual transit smartcard on mobile can be, with nationwide transit and e-money, lightning fast performance and Apple Map integration rolled into one.

Express Transit arrived in Beijing and Shanghai in 2017 with the iOS 11.3 addition of PBOC payment technology to Apple Pay, but the cards remained in beta up until iOS 12.3 (more China transit cards were on tap for iOS 11.4 but pulled before release), are not yet interoperable in other transit areas, require a China UnionPay debit card for recharge instead of any Apple Pay card, and have limited e-money options.

iOS 12 added MIFARE support which is the technology used for contactless Student ID cards that launched in September 2018. Student ID cards are basically Express Transit cards called ‘Express Mode’, without transit, that open door locks and come with e-money services. The arrival of MIFARE in iOS 12 laid the ground work for transit cards to launch on Apple Pay in America.

The addition of Portland TriMet Apple Pay HOP (launched May 21), and Chicago Ventra (coming later this year) marks the first time that iPhone users in America have the opportunity to use Apple Pay Express Transit en masse. Even snotty TfL users don’t have that and will probably never have Oyster cards on digital. iPhone users have already used EMV contactless Apple Pay credit/debit cards for transit in Portland and Chicago for some time, so why did Tim Cook go out of his way to mention them at the Apple Special Event on March 25? It’s the Express Transit card thing, best captured by Suica on Apple Watch in this tweet:

Native Express Transit vs EMV Contactless

Using Apple Pay Suica in Japan for instant transit and store purchases nationwide without using Face ID/Touch ID spoils a person for using anything else in Wallet. I use Apple Pay credit cards to add money to Suica and little else.

I spent the summer of 2018 in Salt Lake City learning just how slow and bumpy the average Apple Pay EMV American checkout experience is. Checkout terminal infrastructure is creaky with poorly marked tiny NFC hit areas and little or no user feedback. Invariably I heard, “try it again” or the ultimate punchline, “You’re holding it wrong.” No wonder in-app payments are bigger than standard Apple Pay in America. Things are rough on the system backend too: UTA unceremoniously dropped Apple Pay EMV contactless support while I was there.

Native Express Transit cards like Suica and HOP on Apple Pay fully reproduce the slick user experience of plastic transit cards adding much more functionality and convenience: anytime, anywhere reload/recharge with Apple Pay, changing transit options via an app, while doing away with small but important Apple Pay EMV stress points such as using Face ID/Touch ID and dealing with multiple Wallet cards. Chicago Ventra support offers some insight on the current state of EMV transit without Express Transit:

  • Get your device ready, first, for fastest entry
  • “Card clash”: touch only your desired payment method
  • Multiple credit cards: always use the same card on the same device on Ventra readers

Another downside of EMV contactless is that it’s a very dumb smartcard that cannot support various point to point fare structures (student, senior, commuter passes, etc.). EMV is also the slowest payment technology out there. It was created by a credit card consortium for leisurely check out at a department store, not for daily crush of commuters zipping through transit gates at rush hour. EMV transactions are always slower than a transit card at the gate with none of the functionality or benefits. The differences between native transit virtual cards and EMV are nicely captured on the HOP page.

HOP card on Apple Pay and Google Pay

iOS 12.3 added a EMV Express Transit option for payment cards (credit and debit cards) to be used like a transit card on open loop transit systems that support it. At present TriMet is the only system that supports Apple Pay EMV Express Transit. As the iOS 12.3 Wallet Express Transit option setting makes clear, there are transit cards and there are payment cards. Express Transit payment cards are sort of like transit cards, except they’re not.

Payment cards are owned by the bank, not the transit company or the customer. That means conditions for both transit company and customer to use it. Service can be turned off without notice, such as Singapore transit users stranded mid-trip with canceled cards. Transit cards however are owned by the customer, the prepaid balance you put in them is yours. Anybody, even without a credit card or credit rating to their name, can get a transit card.

I’ve always questioned the purported wisdom and convenience of letting banks directly on transit fare gates. It’s a devil’s bargain as Chicago Ventra found out with their own Mastercard branded debit card experience. Predatory banks and fees will never go away. My position is that it’s a better long term business opportunity for transit companies to limit bank cards to the backend for adding money to transit cards on digital wallets, where they really shine, and focus instead on building better services tied to transit cards that benefit customers and businesses of the entire transit region, aka a transit platform business model.

Building a Future: interoperable transit cards and e-money

There is some interesting discussion regarding Express Transit vs EMV on the MacRumors site. Most people see the convenience of Express Transit without Face ID/Touch ID, some don’t. Heavy travelers in particular prefer one EMV card thing to ride transit anywhere rather than juggling different transit cards. It’s a trivial issue on digital wallets but they have a point. It is exactly a key issue explained by Egon Terplan in his article Falling in Love With the Trains of Japan: nationwide interoperable transit cards.

It took Japanese transit companies a decade to make their transit cards interoperable with each other through incremental upgrades on backend systems and IC smartcard issuance. This is much easier to achieve with digital wallets attached to cloud backends, and since most transit fare card systems in America are designed and/or operated by the same company, Cubic Transportation Systems, interoperable transit cards shouldn’t be that hard to do. It doesn’t take much imagination to see the usefulness of a HOP prepaid card that works on Chicago Ventra, NYC MTA, LA TAP, and vice versa.

This usefulness can be vastly expanded with the addition of an e-money service that frees the prepaid card balance for other uses outside of transit, a transit card version of John Hopkins J-Card or DukeCard e-money that works nationwide is a powerful thing. It is hard to explain just how powerful and transformative simple things like Apple Pay Suica Express Cards can be unless you experience them first hand. The simple ‘it just works’ success of Suica is built on layers of infrastructure where each new layer adds functions that strengthen the whole.

Now that transit cards are finally arriving on digital wallets in a big way this year, with Apple Pay and Google Pay delivering some of those advantages to smartphone users, I hope that America can experience it and be inspired to build regional interoperable transit platform businesses over time.

Looking ahead, New York MTA OMNY EMV contactless service launches May 31, with Apple Pay EMV support at launch or shortly after. LA Metro has said they expect Apple Pay EMV support for the TAP fare system later this year as well. Neither system is expected to support Apple Pay Express Transit at launch.

Meanwhile Hong Kong iPhone users are fervently hoping for Octopus on Apple Pay with Express Transit now that the Smart Octopus on Samsung Pay exclusive is apparently over. iOS 13 might be a Apple Pay Transit coming out party for many. That would be great fun.

Last but not least here are some Express Transit card tips and other things I have learned from 2 years of daily Suica use.

  • HOP and Ventra cards use the same MIFARE technology as Student ID cards, Express Transit device specs are the same: iPhone 6S and later, Apple Watch Series 1 and later, iOS 12.3 or watchOS 5.2.1 or later.
  • Express Transit only works while Face ID/Touch ID is active. Express Transit stops working when Face ID/Touch ID is disabled. It is easy to disable Face ID without realizing it, resulting in a rude passcode request at the transit gate. iPhone X, XS, XR users need to be extra careful if wearing a face mask during a commute, 5 misreads disable Face ID, or putting the device in a fairly tight pants pocket as pressure on the side buttons also disables Face ID. iPhone X, XS, XR users can avoid these issues by turning off Raise to Wake. If you still have problems the last resort is turning off Face ID for unlocking iPhone, be sure leave it on for Apple Pay.
  • Express Transit works great on Apple Watch, depending on which wrist you use, but in winter when wearing layers of clothes, iPhone is faster to whip out at the gate. iPhone is also free from ‘left wrist vs. right side’ gate reader issues. As one reader points out: “Apple Watch works great for Express Transit except it’s on the wrong wrist in many cities. I’m a broken record at this point but a smart band would be a terrific addition to the lineup (and would solve this problem).” Adding money/reload/recharge to HOP and Suica transit cards with Apple Pay on Apple Watch is also much less convenient than iPhone.
  • iPhone X users need to be aware of the iPhone X NFC problem which can cause endless gate errors with Express Transit. You may need Apple to replace it, never an easy thing.
  • iPhone XS/XR users can finally put the Express Cards with power reserve feature to good use, it is cool and assuring knowing that you have 5 hours of reserve power to clear the final destination gate.

UPDATE

Apple Pay HOP launched on TriMet May 21. Loading HOP differs from Apple Pay Suica in that direct plastic card loading to Wallet is not supported and a HOP account is required. HOP is similar to Suica in that the plastic card is deactivated when it is added to Apple Pay Wallet, only one card can exist one device at any time: the same Apple Pay HOP card cannot be on both iPhone and Apple Watch.

New iPhone users with iOS 12.3 or Apple Watch users with watchOS 5.2.1 can download the HOP Fastpass App and add a virtual HOP to Apple Pay Wallet with a $3.00 fee. Plastic HOP users can add their card to Apple Pay Wallet with the HOP Fastpass App. There are TriMet video explanations for new users and existing plastic HOP users.

TriMet supports 2 kinds of Express Transit. Apple Pay HOP Express Transit is exactly the same as a plastic HOP card. It’s just as fast and supports the full range of fares. EMV Express Transit allows a payment care (credit/debit) to be set for transit but uses slower EMV mode and only supports standard Adult fare.

Last but not least some local news coverage of “the first time in America” use of Apple Pay Transit that explains the details:

“first time in America” for Apple Pay Transit