WWDC21 Apple Pay Wish List: new Wallet app

It’s that time of year again, to ponder the mysteries of Apple Pay, Wallet, PassKit and Core NFC in the next major iOS release. I wasn’t planning a list this year because all the things covered last year: UWB Touchless CarKey, QR Code Payments, etc., are still lurking in PassKit calls and internal beta test builds and have yet to see the light of day. And then there is App Clips, a solution that finally leverages the versatility of NFC tags and iPhone NFC with reader mode was the big WWDC20 story, but it didn’t come into focus either. Too many COVID distractions.

No, no, the only thing that mattered to users and developers was this: when will Apple do something about the Face ID with face mask problem? The eagerly awaited iOS 14.5 Unlock with Apple Watch feature will almost certainly be the most popular feature of iOS 15 too. There are some interesting new PassKit tidbits in iOS 14.5: PKRadioTechnology type properties for NFC and bluetooth, the later for UWB Touchless use. This is the same pattern we saw at the end of the iOS 13 cycle with PassKit Secure Element Pass references replacing NFC Certificate Pass.

So what’s on the slab for all things WWDC21 iOS 15 Apple Pay? I have no idea. UWB Touchless and QR payment support lurking in the background might see the light of day, App Clips might get some refinements. Nothing really new. So I asked readers what they wanted for iOS 15 Apple Pay and the answer was clear: a Wallet app reboot. I didn’t think much about it until I saw the list of China T-Union add card Wallet options for mainland China.

The Apple Pay China Transit card list is long and getting longer

More Apple Pay Transit cards are on the way but there’s another problem, digital ID cards (passports, driver’s license, national identity cards, etc.). Apple Pay Student ID MIFARE cards landed back in iOS 12, but Apple has grander plans revealed in a NFC digital ID patent filing. The Japanese Ministry of Internal Affairs and Communications (MIC) has plans for a digital version of My Number Card (Individual Number Card) and is already in negotiations with Apple. Where and how do digital ID cards fit in the current Wallet model that only holds a maximum of 12 cards? Something has to give.

Wallet has a very simple rule: any card that loads a Java Card applet into the secure element has to reside in Wallet, the maximum number depends on how many Java Card applets it can hold at any one time. Any card or developer that wants to loads applets and use the secure element also has to have a PassKit NFC/Secure Element Certificate Pass. This is covered by NDA but a company called PassKit (not Apple) gives us an idea what Apple’s NFC/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.

Yeah, the end to end user experience, the whole reason behind the success of Apple Pay. But the Apple Pay user experience has seriously declined in the Face ID with face mask era. The current Wallet with its card metaphor has reached a wall, stuffing digital ID and Code Payments into the mix along with non-secure element Wallet tickets, boarding passes and reward cards, all using same old card UI, will only break the user experience on top of the Face ID with face mask inflicted damage.

Even if Apple doesn’t add new functions to iOS 15 Apple Pay, they must lay groundwork for a new, flexible and far more useful next generation Wallet app, for adding, storing, configuring and most of all, using an even growing collection of payment cards, transit cards, CarKey, reward cards, passes and digital ID items. Anything to save us from the cacophony of payment services, apps and reward goodies chasing our money and slowing us down at checkout with finding, unlocking, displaying a reward code (if the WiFi connection is good, heaven help those waiting in line when it’s bad) and finally paying. Whew.

The whole point of Apple Pay Wallet was to free us from physical card clutter. After 7 years of Apple Pay and payment apps we have digital clutter that’s almost worse than the original problem that digital wallets and smartphones were supposed to free us from. Let’s get our eyeballs and attention spans back.

Apple Pay Japan 2020 Wrap Up Wish List

A two word summary for people in a hurry: COVID and PASMO. As everybody in Japan knows at this point, COVID drove cashless payment use more than any government program could, or anything else for that matter. Cashless went from being the perennial ‘next big thing’ to first choice at checkout in a surprisingly short time with a growing number of ‘cashless only’ places. Here’s a short recap of the best and worst all things Apple Pay Japan in 2020.

The Worst: Face ID Apple Pay
COVID meant mandatory face mask wear outside the home. iPhone Face ID users outside of Asia quickly learned that Face ID and especially Face ID Apple Pay really sucks with face masks. Apple tweaked Face ID slightly to alleviate the issue but this is a long term problem with no short term workaround. Apple had the foresight to resurrect Touch ID in iPhone SE 2, the right device coming at the right time. For the time being it will hold up the middle and lower range iPhone user base in Japan. Face ID is such a marketing embarrassment right now that Apple only features Touch ID recharge on the Apple Pay PASMO page. The real short term future proof Face ID Apple Pay fix is Apple Watch.

The Biggest: Apple Pay PASMO
Mobile PASMO finally joined Mobile Suica, first on Osaifu Keitai Android then Apple Pay, the biggest and most important launch for Apple Pay Japan in 2020. Suica and PASMO combined represent 80% of the entire transit IC card market. In terms of pure usability, a large and diverse installed base, with Express Transit powered transit and purchases on iPhone and Apple Watch, PASMO easily beat all other Apple Pay service rollouts this year. Apple had VIP execs and foreign media on hand at the press event, something they haven’t done since the Apple Pay Japan launch in 2016.

The Most Influential: Toyota Wallet
The Toyota Wallet App rollout I wrote about a year ago turned out to be the model everybody is doing now: ‘XX Pay’ or ‘XX Wallet’ app consisting of a user account linked to a bank or credit card with a flexible payment dual mode front end offering QR Code payment via the app and a ‘instant issue’ prepaid card in Apple Pay Wallet. The Apple Pay Line Pay card launched on December 22 is the exact same model. Instant app issue debit and prepaid Wallet cards do away with plastic issue costs and lower the user entry bar, amount other things. Expect more of this in 2021, actually expect everybody to do this in 2021.

The WildCard: App Clips
iOS 14.3 App Clip Code support completed the picture for App Clip developers, but it will take time to see how they play out in a market overcrowded with mobile payment options. I think there is always a chance for a low cost high quality service which intelligently designed App Clips can deliver. The key will be solving the Japanese Softcream Cashless Index (SCI) Challenge: can App Clip cashless do a faster more reliable job than good old food ticket vending machines, without an app and without an account? How streamlined can it be and still be an App Clip? I hope we can find the answers to those questions in 2021… but there’s one more thing.

The Missing: Apple Pay Code Payments
The iOS 14 Apple Pay AliPay/Apple Pay Code Payment has been in open secret test mode for nearly a year with no firm release in sight. If screenshots are anything to go by, Apple Pay Code Payments are done with a virtual Wallet ‘card’ like any other and Apple Pay Wallet cards have certain properties:

  • Direct side button Wallet activation with automatic Face/Touch ID authentication and payment at the reader.
  • Device transactions handled by the eSE without a network connection.
  • Ability to set a default main card for Apple Pay use.

Supporting QR Code payments with an Apple Pay Wallet ‘card’ moves QR payments out of the app and removes some, but not all, of the QR payment friction points. It makes App Clips a better user experience too when all payments can be accomplished with Apple Pay.

Ultimately I hope the Apple Pay Wallet card model moves away from single mode technology and evolves to multimode awareness that encompasses NFC, Ultra Wideband, QR, etc. It has too. Our smartphones must be smart and take care of any payment technology for us. They have to because things are only going to get more complicated. People ridicule the Japanese payments landscape but that will be everywhere. Card companies and banks push EMV as a ‘global standard’ but EMV already comes in different flavors like PBOC, so does NFC (NFC A-B-F-V), and Ultra Wideband is joining the mix.

That’s what digital payments are all about: combining complex things into ‘it just works’ simplicity. Anybody can create or load a Suica, Octopus or PASMO into Apple Pay, without signing up or creating a new account, and start using it for lots of different instant payments. That’s how simple it should always be. That’s my 2021 Apple Pay wish.

Best wishes for a happy and safe 2021.

UPDATE: Reader Apple Pay Wishes for 2021

>Mine would be for VISA Japan to support Apple Pay.

>Mine are resurrecting #FeliCa-based @VisaJP TOUCH (can be rebranded), @id_credit re-attempts @ #FeliCa network expansion overseas starting w/ equipping end-users w/ the technology in new card distribution (via digital & physical), & @JCB_CARD expands @QUICPay_PR network overseas.

Apple Pay Contactless Adoption Outlook 4Q 2020

MacRumors posted an interesting comment Tim Cook made in the 4Q 2020 earnings call

As you can imagine in this environment, people are less wont to hand over a card. Contactless payment has taken on a different level of adoption and I don’t think we’ll go back. The United States has been lagging in contactless payments and I think the pandemic may very well put the U.S. on a different trajectory there. We are very bullish on this area and there are more things that Apple can do in this space so this is an area of great interest to us.

What exactly are the ‘more things that Apple can do in this space’ Tim is talking about? There are two iOS 14 Apple Pay features that haven’t arrived yet: App Clips and Apple Pay QR Code Payments.

App Clips are ‘here’ but you wouldn’t know it. An October 22 tweet announced 2 Tokyo coffee shops offering App Clips, the debut locations for Japan. NFCW reports ExxonMobil’s ‘point and pay’ App Clip with App Clip Code stickers at USA gas pumps though only the NFC tag part is working. ExxonMobil rolled those out the same time as Japan. Ken Nishimura of Coral Capital has an interestingly detailed write up of the Tokyo App Clips launch with a screen recoding of the App Clips order process.

We are cashless…App Clips at Tailored Cafe but the nifty Apple-designed App Clip Code stickers aren’t available in Japan yet (Coral Capital blog)

The problem is that the Apple-designed App Clip Codes aren’t fully ready yet and require a future iOS 14 update (iOS 14.3?) to enable optical code reading, as noted in the iOS 14 web page fine print. Also note the 2 flavors of NFC tag reading iPhones: 1) automatic NFC with reader mode (iPhone Xs and later), 2) manual Control Center NFC scan mode (pre-iPhone XS).

I expect iOS 14 Apple Pay QR Code Payments to arrive at the same time. It only makes sense to enable and launch App Clip Codes + Apple Pay QR Code Payments together as one rollout. The only question is announcement timing. We already have the ‘soft’ App Clips Code October 22 launch in Japan and USA. If Apple holds another event this year, I think there’s a very good chance we’ll hear about it.

UPDATE
iOS 14.3 beta has support for Apple designed App Clip Code scanning. Here is a quick screen recording of the scan process and animation. The App Clip Code is a photo of the ExxonMobile gas pump stickers that launched October 22. The App Clip does not load because the ExxonMobile App is not available in Japan.