Recent Hong Kong rumors say the long delayed Apple Pay Octopus will finally launch in
March April May 2020 along with the recently announced Apple Pay support for Guangzhou, Shenzhen and Foshan China T-Union transit cards. The rumors also say that putting China T-Union cards on Apple Pay is easier than Octopus. Is this true? Let’s take a look.
The chart below lists native transit cards hosted on mobile digital wallets by service launch year, limited to reloadable virtual transit cards already in service or formally announced by wallet platform vendors (Apple/Google/Samsung/etc.) and/or transit operators. Best viewed in landscape mode.
|2006||Mobile Suica||Japan||JR East||Osaifu Keitai/Symbian||F||Mobile FeliCa|
|2011||Mobile Suica||Japan||JR East||Osaifu Keitai/Android||F||Mobile FeliCa|
|2015||Tmoney||Korea||Tmoney Co. Ltd||Samsung Pay||A||MIFARE|
|cashbee||Korea||EB Card Co.||Samsung Pay||A||MIFARE|
|2016||Mobile Suica||Japan||JR East||Apple Pay||F||Mobile FeliCa|
|China T-Union||China||Various||Huawei Pay/Samsung Pay||A||PBOC 2.0|
|2017||Beijing/Shanghai Transit||China||BMAC/SPTCC||Apple Pay||A||PBOC 2.0*|
|2018||iPass||Taiwan||iPass Co.||FitBit Pay/Garmin Pay||A||MIFARE|
|EasyCard||Taiwan||EasyCard Co.||Garmin Pay||A||MIFARE|
|Smart Octopus||Hong Kong||OCL||Samsung Pay||F||Mobile FeliCa|
|Smart Octopus||Hong Kong||OCL||Apple Pay (announced/delayed)||F||Mobile FeliCa|
|Ventra||Chicago||CTA/Cubic||Apple Pay (announced/delayed)||A||MIFARE|
|Mobile myki||Victoria||Public Transport Victoria||Google Pay||A||MIFARE4Mobile|
|2020||Shenzhen||Greater Bay Region||Shenzhen Tong Limited||Apple Pay||A||PBOC 3.0|
|Guangzhou||Greater Bay Region||Guangzhou Yang Cheng Tong Limited||Apple Pay (announced)||A||PBOC 3.0|
|Foshan||Greater Bay Region||Apple Pay (announced)||A||PBOC 3.0|
|SmarTrip||Washington DC||WMATA/Cubic||Apple Pay (announced)||A||MIFARE|
|EasyCard||Taiwan||EasyCard Co.||Samsung Pay||A||MIFARE|
|Ventra||Chicago||CTA/Cubic||Google Pay (announced)||A||MIFARE|
|Mobile PASMO||Tokyo||PASMO||Osaifu Keitai||F||Mobile FeliCa|
Transit card payment mobile protocols are FeliCa, MIFARE and PBOC 2.0/3.0, the later is the Chinese variant of EMV which uses Type A NFC with the slowest grocery store checkout transaction speeds of the three protocols:
Each card organization has formed its own specifications based on the EMV specification based on its own business refinement and expansion, such as China UnionPay’s PBOC 2.0 specification…PBOC based on the EMV standard, combined with the needs of domestic banks, the People’s Bank of China promulgated the PBOC series of standards:Super Lu
1 PBOC1.0: e-wallet / electronic passbook / magnetic stripe card function
2 PBOC 2.0: E-wallet extension application, debit/credit application, personalization guide, contactless IC card standard
3 PBOC 3.0: Cancel e-wallet and electronic passbook application, cancel downgrade transaction, multi-algorithm extension, multi-application extension, mobile payment standard
Compared to other contactless smartcards in use, the data transmission of <China T-Union> Yang Cheng Tong is criticized by commuters that it takes 1~2 seconds between the card and reader to complete the transaction, though the operator claims that the data communication only takes 0.5 seconds in its official site.Wikipedia Yang Cheng Tong
Some China transit cards used FeliCa and MIFARE protocols in the past but have been migrated to the PBOC 2.0/3.0 China T-union card spec for interoperable transit cards that work across the country, similar to what Japan has with Suica, ICOCA, PASMO, etc. Mobile FeliCa developed by Sony and NTT Docomo has been around the longest and works across multiple mobile hardware platforms from Symbian handsets, to Android, to iOS/watchOS. MIFARE has a shorter history on mobile, PBOC 2.0/3.0 is basically new. The key period is 2015~2016 which saw transit card debuts on Apple Pay, Samsung Pay and Huawei Pay. Initial Apple Pay support for Beijing and Shanghai transit cards was listed as beta on iOS 11.3. The early Apple implementation was not the full PBOC 2.0/3.0 spec, apparently fixed in iOS 12.3 when the beta label was removed.
One of the biggest advantages of transit cards in digital wallets is the freedom of anywhere anytime recharge with credit/debit cards; transit users are no longer chained to station kiosks to recharge plastic smartcards or renew a pass. The more payment options supported on the recharge backend, the more convenient. These are great customer features, so why is it taking so long to get transit cards on mobile in America and Europe when there are some 257 China T-Union transit cards already on mobile?
Many transit card fare systems outside of Asia are managed by Cubic Transportation Systems, including Oyster, Opal, Clipper, OMNY, Ventra and SmarTrip to name a few. Cubic and operators like Transport for London and Transport for NSW have focused primarily on Open Loop EMV card support as a mobile solution instead of native virtual transit cards.
Publicly run transit system resources are usually limited so using bank cards for open loop transit is seen as a way to reduce system costs. The downside is that banks get a cut from transit gate transactions and transit cards for mobile are slow in coming, if at all. Cubic’s very first virtual transit card effort, the long delayed Apple Pay Ventra, is all the evidence you need when open loop is a priority and transit cards are not. Despite the recently announced Google Pay and Cubic alliance, I think transit cards on mobile will continue to arrive in a slow trickle. Let’s face it, HOP is the only American transit card that has gone mobile so far, and it’s not managed by Cubic. It’s the same story in Australia with Melbourne myki Google Pay.
Putting aside the open loop fad for a moment, I think the large deployment of China T-Union cards on mobile comes down to a few simple things that has nothing to do with protocols or smartphone hardware: all China T-Union cards share a common recharge backend cloud provided by Union Pay. It’s the reason why China T-Union sports a similar logo, the Union from Union Pay, and can only be recharged with a Union Pay card. It’s all one package. And China T-Union cards have to be created on the device, plastic card transfers are not supported. From Apple Support:
You can create a new transit card in Wallet to use with Apple Pay. The first transit card that you add to Wallet automatically becomes your Express Transit card.Add a transit card to Apple Pay in mainland China
Eliminating plastic card transfers and a common Union Pay recharge backend cloud shared by all transit cards with the same card architecture makes hosting virtual cards much easier, the various transit operators don’t have to host everything directly or build a cloud backend from scratch, and there’s nothing to negotiate because Union Pay is the only payment network.
China T-Union in the cards for Hong Kong Octopus?
China T-Union illustrates the power a national transit card standard backed with a shared cloud resource but it’s a streamlined straightjacket: Union Pay is the only payment network allowed, there are far fewer service options than Suica or Octopus systems. The real interesting development here is that QR Codes (AliPay/WeChat Pay) for transit, and everything else, are mainstream in China. There are many reasons for this outcome but on the transit gate QR Codes and PBOC-EMV transit cards are pretty much the same speed. There isn’t enough difference to care, and AliPay/WeChat Pay represent a choice outside the Union Pay straitjacket with all kinds of incentives to use QR.
Another interesting development is the pressure from QR Code players like Alipay for a piece of MTR transit gate action, and the Greater Bay Area transit card negoiations with Yangchengtong on the Hong Kong MTR/Octopus Card Limited mobile strategy roadmap. QR is mobile only of course, but a dual mode FeliCa/PBOC card approach for the Greater Bay Area is much cheaper and easier to implement on mobile than plastic.
Unfortunately in the face of pressure MTR/OCL, a world leading transit platform business model and innovator, has been surprisingly slow rolling out virtual Octopus card service on digital wallets to encourage the migration from plastic cards with new kinds of mobile services. It’s a troubling turn of events because OCL has all the necessary transit on mobile infrastructure in place to move forward quickly, and has for some time.
The Hong Kong protests followed by the COVID-19 crisis have certainly slowed things down. In the end however, growing mobile services is the best way forward for Octopus to remain a viable Hong Kong MTR business in these uncertain times. Because if it does not, Octopus risks becoming just another China T-Union card. Put another way, if OCL doesn’t innovate and invest it its future as a world’s leading transit platform, it does not have one.