Tag: Apple Pay

JR West announces Apple Pay ICOCA

With the successful launch of Mobile ICOCA (2023-03-22) on Osaifu Keitai Android, it’s time to think about Apple Pay ICOCA that was formally announced today (2023-04-17) as coming ‘this year’, possibly in October to align with iOS 17 though there is no technical reason preventing a launch on iOS 16. It all depends on how quickly Apple tests and qualifies ICOCA for Apple Pay, and how badly JR West wants to launch.

And believe me, Apple Pay ICOCA needs to launch sooner than later because JR West will never achieve their stated goal of 5 million Mobile ICOCA users without Apple Pay. However the ICOCA service menu on Apple Pay will be different than Suica or PASMO. Apple Pay Suica works out of the box without Suica App or registering an account. Apple Pay ICOCA however, will require ICOCA App and a registered WESTER ID. Let’s take a look.

Apple Pay ICOCA Wallet native features or ICOCA app?
The Mobile ICOCA app for Osaifu Keitai Android allows registered WESTER users to add a new ICOCA, transfer a Mobile ICOCA card from another device, reissue a Mobile ICOCA (from a lost or damaged device). The key point is that: only registered WESTER ID users can create and add a Mobile ICOCA card. No plastic card transfers to mobile are allowed because they include unregistered cards bought at a station kiosk. Does this means ICOCA will not have native Apple Wallet add card support like Suica and PASMO? Technically transit cards added natively in Wallet are ‘unregistered’ cards, but in reality they are registered to the Apple ID. A careful reading of JR West’s carefully worded Apple Pay ICOCA announcement states, “you can add your ICOCA card to Wallet.” JR West is playing it carefully, it might be native Wallet add, or transfer plastic card add. We won’t know until service details are released, but releasing a different and more limited service than Apple Pay Suica or PASMO won’t wash well with vocal Kansai area users.

If JR West goes the WESTER only route, we’ll have the Japanese version of HOP or Ventra. When you take a look at the transit card list in Wallet for the United States you’ll notice that Chicago Ventra and Portland HOP are not listed even though they appear on the Apple support page: Where you can ride transit using Apple Pay. This is because even though these cards can be added to Wallet, they have the same limits Mobile ICOCA does: only registered cards can only be added from an app, plastic card transfers to Wallet not supported.

JR West is doing this because they are positioning Mobile ICOCA on Android as part of the JR West WESTER portal service for points, eTickets, and more. You have to have a WESTER ID to add and use Mobile ICOCA. Why? I suspect it has to do with the end of paper ticket coupons, the old reliable buy 10 get one free. These were incredibly popular in the JR West Kansai area and said to be one of the reasons why it took so long for ICOCA to go mobile. Having WESTER and Mobile ICOCA as one package deal means JR West has the mobile equivalent of paper ticket coupons in place using WESTER point rewards.

JR East’s focus on the other hand, is all about growing the Mobile Suica user base with JRE POINT as an option that adds value to being a Mobile Suica user. Yes JRE POINT and Suica offer the mobile equivalent of paper ticket coupons too, but the JR East service ecosystem is messy. Users have to register and juggle separate accounts for Mobile Suica, JRE POINT, Eki-Net, VIEW CARD and so on. JR West is shoehorning all of their services into one WESTER ID to streamline everything and make it easier for users.

Full embrace of Apple Pay drives growth
One of the very nice things about Suica is that anybody can add it to Wallet and recharge it with Apple Pay credit cards. Apple Pay Suica Commuter Pass users can also renew passes in Wallet directly. Will ICOCA have the same? The announcement suggests so, a good sign because if JR West keeps Apple Pay at arms length and restricts all recharge and commuter pass renewal to ICOCA app, there will be no add money button in Wallet and no recharge with Apple Pay. This is what we see with Apple Pay Ventra and Apple Pay HOP: card issue, recharge, commute plan renewal is all restricted to registered account users in the iOS app. This kind of recharge limitation is a huge pain for Apple Watch users. We won’t know for sure until JR West releases clearly outlined service details.

JR East achieved 20 million Mobile Suica users because of their full embrace of Apple Pay and unregistered Mobile Suica cards. Users can add and use Suica on iPhone and Apple Watch right out of the box without a Mobile Suica account or an app. It just works. It’s the deal same for Mobile Suica on Garmin, Fitbit and Pixel Watch. The Mobile Suica service ecosystem may be messy, but it works on a huge variety of mobile devices.

The JR West approach is streamlined but does risk reducing the potential Mobile ICOCA user base by restricting it to WESTER ID account holders and ICOCA App. Little details like full Wallet support makes all the difference. It all comes down to business choices: JR West wants WESTER ecosystem users, JR East wants Suica users, but how much does JR West want Mobile ICOCA users? If JR West closes the door to unregistered Mobile ICOCA on Apple Pay and Wallet recharge, Kansai users who don’t need commuter passes or WESTER points will use Mobile Suica. Actually, they already are.

This post was originally uploaded 2023-03-23, it has been updated and reposted with the official Apple Pay ICOCA announcement and will be updated as new service details are released.

Wallet app can only natively add transit cards that do not require registration to use, this is why HOP and Ventra cards are supported in Apple Pay but do not show in Wallet app. They can only be added with an app and registered account.
If JR West removes add money and commuter pass renewal buttons from Wallet and keeps them locked away in ICOCA app, they can forget about achieving their 5 million Mobile ICOCA user target
JR East embracing Apple Pay and native Wallet functions allowed them to grow Mobile Suica to undreamed of user growth.
Apple Pay PASMO launched 2 months after the announcement. Same timing for Apple Pay ICOCA would be a launch around 2023-06-17

Mobile payments don’t solve the wallet mess, they only make it worse

Ha, ha, thanks to the proliferation of code payment apps with coupons, checkout takes longer than ever.

Way back when Tim Cook first unveiled Apple Pay, the main sales point was the convenience of doing away with messy wallets. My mom’s wallet for example was always stuffed full of credit cards, point cards and the latest store discount coupons clipped out of newspapers and flyers. The promise of Apple Pay was, “look ma, no more messy wallet.” Except it didn’t work out that way.

The rise of code payment point economic zone like PayPay, dPoint and Rakuten Point has resulted in mobile payments that take longer than mom’s messy wallet ever did. I was reminded of this recently getting lunch at Doutor Coffee. A youngish woman paying in front of me wasn’t really paying. With smartphone flat on the counter, lavishly nailed fingers leisurely tapped away for 5 full minutes as she completely ignored the cashier waiting to read the QR code, everybody else waiting in line be damned. Instead of getting read to pay she was signing up for some pissy small payment app discount coupon. And when that was done she finally paid with a QR code for a cup of hot cocoa, face full of discontent. Or maybe that was her normal character.

You see that kind of checkout line behavior everywhere in Japan these days: half losing oneself digging around in an app to find a coupon or campaign special, half ‘screw you’ that often skirts on taking pleasure from somebody else’s pain. People literally loose themselves in the moment.

Who’s to blame for this state of affairs? QR Code payment apps that offer all kinds of coupons certainly deserve some of the blame, along with crappy in-store wifi, or lack thereof. Apple Pay deserves some blame too. Let’s face it, Apple Value Added Service (VAS) NFC protocol has been abysmal failure in the Japan market despite dPOINT and PONTA support. And who’s the biggest culprit of all? All of us of course…all of us who actually believed that technology could fix human behavior. In short this issue isn’t going to be fixed. All we can do is remember to chill, pay attention to our surroundings and be polite in the checkout line.

iOS 16 Apple Pay and Wallet Fine Print Features

iOS 16 doesn’t have many big new flashy features. There is the Dynamic Island for iPhone 14 Pro, which I would love to have but I’m holding on to my iPhone 13 for another year…or two. Fortunately there are plenty of nice refinements for the rest of us without the latest greatest iPhone hardware, Apple Pay and Wallet are no exception. The full list is on the New features available with iOS 16 page. As usual the iOS 16 and watchOS 9 pages for each country are edited to reflect available, or coming soon, “Key Features and Enhancements” for the region balanced against the full spec USA feature set.

An interesting thing about iOS 16 Apple Pay and Wallet is that not all the listed features apply to regular users…at least not at first. Some are behind the scenes stuff for merchants and developers that will take time to land in our Apple Pay Wallet as features we can use. Let’s take a quick look by breaking down the categories.

1) General improvements (for everybody)
Quick access menu: a handy new shortcut menu for all Wallet cards and passes via tapping the More button. The menu varies according to the card feature set. Transit cards like Suica have the most, payment cards without notifications (all Japanese issue payments cards) have the least. It’s a nice tweak most useful as a fast way to toggle individual card notifications on and off. Zollotech posted a video that covers quick access menus for Apple Card and Apple Cash along with an overview of iOS 16 Apple Pay and Wallet option settings.

Transit card shortcuts
Payment card with notifications
Payment card w/o notifications

Apple Pay Order Tracking: announced at WWDC22, this new Wallet button sitting next to the ‘Add’ button seems like a no-brainer: when I order something with Apple Pay I get automatic tracking…nice but I wonder how it will play out. Apple Store app for example already has robust tracking and accepts Apple Pay, so do a lot of other apps. Will they remove the function from their app, offer choice between in-app or Wallet order tracking, or something else? Either way it will be a while before we see merchant updates.

2) Digital key features (for most markets): iOS 15 was the Apple Pay and Wallet upgrade that set the course for the next few years with keys and ID. The iOS 16 improvements are about making adding a key and family sharing easy. Hotel keys are now sharable like car and home keys, gotta let the kids have access and all…though I suspect office keys remain on the un-sharable list.

Key sharing (coming with an update later this year): in addition to Messages and Mail, 3rd party messaging apps such as What’s App will support key sharing. In Japan the only 3rd party messaging app that matters is Line. iOS 16 looks to be the breakout year for keys in Wallet.

Add keys from Safari: more important that it might seem at first, there are plenty of uses for loading a key into Wallet from a time sensitive Safari web page link instead of the usual time wasting mess of downloading an app, creating an account, making a reservation, etc. You know the drill. Digital key issue remains a complex thing that usually requires an app with an account to securely issue a mobile key remotely with set limitations (time, area, etc.). Hopefully adding keys in Safari gives developers easier service options, but connecting identity with access remains a challenge.

It’s important to note that issuing digital keys is only one step of the complex process that allows guests to bypass the front desk. Apple’s announcement certainly does not spell the end of the hotel app as we know it…

It’s a big step toward streamlining a process that has, until this point, prevented many guests from using their phone as a digital room key. But, Wallet only solves one segment of the end-to-end operation required to get a guest checked in and room access issued. The bigger issue is connecting identity with access, which requires many more steps beyond issuing a key.

How Apple’s Newest Features Will Affect Hotel Check-in

The solution to this is the new iOS 16 ID in Wallet features for apps in the next section.

Multi-stay hotel keys: if you stay in the same hotel chain on your trip that already supports Wallet hotel keys, you might have the opportunity to use this feature where you load one hotel key into Wallet that works across all your reservations. Like order tracking I think this one will take time for the major hotel chains to get onboard, and of course the devil is in the check-in/activation details.

Easy device migration for keys: I assume this refers to the Previous Cards Wallet category that came with iOS 15. The iOS 16 features page text blurb suggests a possible UI tweak, but I don’t have any key to test. We’ll have to wait and see.

3) ID in Wallet features (USA only): the next big step for ID in Wallet after getting them out the door is app support. This is where digital ID moves beyond airport TSA security checks and becomes really useful.

ID cards presented in apps and Verify your identity in apps sound exactly the same so you have to read the fine print carefully. ID cards in apps describes 2 specific pieces of information: identification and age, validated by Face/Touch ID. Taking a wild guess, there are plenty of account registrations that only need to confirm your identity and age as part of a signup process. Digital ID can vastly simplify the process.

Verify identity in apps describes ‘verified information’, i.e. more than just ‘I am this person, I am xx years old’. The iOS 16 pages shows a car rental app confirming a user’s driver license status and driving privileges. This has a lot more use (and abuse) potential. The hotel app and key issue verification problem mentioned earlier is exactly what digital ID in apps can help solve. MaaS apps are another example where verification is essential for offering special discounts for seniors, locals, inbound visitors, etc. Reliable, secure and universal digital ID would solve a lot of service problems, but privacy, how does the app use digital ID information, how long is it stored, etc., is always a concern.

Apple Pay features for merchants and developers: It’s a little strange that Apple is listing Merchant tokens and Multiple merchant support on the feature page. These are backend additions to PassKit and it will take time for merchants and the developers they employ to implement them. Both of these expand the Apple Pay experience. For me merchant tokens is the more powerful feature, one that enable reoccurring and auto-reload payments. It could be a boon for subscription services and much easier auto-recharge in apps and transit cards like Suica and PASMO. Auto-recharge is one of my favorite Apple Pay Suica features and it would be great if JR East freed it from the shackles of Suica App and View Card and added Apple Pay auto-recharge.

4) Apple Pay Services (for the USA): aka longtime USA only services: Apple Cash and Apple Card with the new addition of Apple Pay Later…coming later this year. All of these fall squarely in heavily regulated banking services, so don’t expect them to expand beyond the USA any time soon. The iOS 15.5-ish rebranding of iTunes Pass into Apple Account card, now with Wallet reload in iOS 16, should expand more quickly.

As with all recent iOS releases, the fun features comes later on in the life-cycle. I’ll update this post as with new information as the iOS 16 Apple Pay and Wallet story unfolds. Until then have a happy cashless, er, you know what I mean.

Cashless is fast and convenient? Point app mania reality check

My partner wanted to pick up some cheap t-shirts on bargain sale at Uniqlo yesterday. The Asagaya station building Beans shopping mall has all the latest cashless options but very bad network service so Uniqlo checkout was a comedy routine. First he brought up the Uniqulo app to get Uniqlo points, then I brought up my JRE POINT app to earn JRE POINT, then he finally paid with QR Code dBarai (docomo). But for each app launch and load we had to run to the store entrance to capture enough network connection for the apps codes to load. The staff is very used to this and suggest customers do so when apps didn’t load, patiently folding clothes while they run back and forth. I asked the cashier if this happens all the time. She smiled and nodded. “Cash is probably faster isn’t it?” She smiled and nodded.

Gosh, just when we thought cashless was going to free us from the so called inconvenient drudgery of cash along came smartphone reward point apps that bog down the whole cashless checkout experience, neatly killing off the supposed time saving advantage. You stand in line while the checkout customer fiddles with smartphone, digging around in an app to find the right coupon code thing. You feel smug until it’s your turn and the networks sucks, the discount coupon doesn’t load and bam, you’re holding up the line too. It has gotten to the point where Nikkei XTECH has provided an Apple Pay help article for faster checkout that explains the benefits of using Apple Value Added Services. Will Apple Pay VAS dPoint and Apple Pay VAS PONTA really help us? Probably not as they only work at LAWSON.

There is another checkout trend I see recently. With price increases everywhere people are using cash a lot more, even at places like in-station Beck’s Coffee Shop. Every customer has a Suica but more young people are keeping it in their pocket and plucking down ¥10,000 yen notes for ¥300 ice coffee. Why? I think it’s Kakebo culture at play, it’s easier to budget with cash payments and the small slightly inconvenient physical routines that accompany it. It’s not about doing everything with cash, but good old tsukae-wake compartmentalization helps keep focus and tamps down the impulsiveness when doing everything cashless. Another way of spreading the risk in these uncertain times.

The Apple Pay monopoly debate part 2: the gatekeeper difference

I’ve always said people should pay attention to the Japan mobile payments market because there is a lot to learn from the successes and failures of the world’s first large scale mobile payment platform. There are important lessons when it comes to the EU Apple Pay monopoly debate and the downsides of having an ‘open’ iPhone secure element and eliminating Apple’s gatekeeper role.

The Osaifu Keitai mobile payment platform that launched in 2004 has supported a lot of different hardware over the years, from Symbian OS handsets to Android smartphones. During that time it has evolved from a carrier exclusive feature with SIM locked devices to the current SIM free market model. The software has evolved too, away from devices with dedicated FeliCa chips to standard NFC chips with GlobalPlatform certified embedded secure elements that do it all, like Pixel and Chinese smartphones sold in Japan. People assume there is a special ‘FeliCa chip’ on FeliCa capable devices but this isn’t the case anymore. Taken altogether those are big messy transitions.

Nikkei recently posted a scare mongering piece, typical for them, about the looming security risk of previous user Suica cards and the like left on Osaifu Keitai devices when resold on the open market. Yes, it’s true, an Android factory reset doesn’t wipe FeliCa junk off the secure element, but it has always been like this so why the sudden handwringing?

For most people this isn’t an issue. When upgrading or repairing a device through carriers or second hand retailers, they wipe both device and secure element as standard practice. It’ a potential problem for Osaifu Keitai devices sold on the open market (Mercari, etc.) as the seller is responsible for clearing off their card junk. This should be done before selling the device of course but like all things Android, it’s a piecemeal process that requires deleting cards in each payment service app (Suica, PASMO, iD, QUICPay, etc). The secure element data can also be wiped at a carrier shop data wipe kiosk. On older pre-Mobile FeliCa 4.0 devices it can be a real chore:

I just about lost my mind when I was unable to even delete Edy on my phone as Rakuten has locked me in app for “fraud.” The whole sitch is indeed ridiculous so I was super happy to see the back of Osaifu-Keitai. Apple Pay truly doing the God’s work here.

You can’t even see if you deleted all the cards as the later FeliCa versions only show “memory in use” without telling you what’s in it. And each app has a different flow & some doesn’t even allow deletion! Complete nightmare.
(Twitter comment)

On Mobile FeliCa 4.0 and later, if virtual cards are deleted, you will see ‘unused’: in that condition, the device can be transferred to a new owner and they will have no problems with it. This is what resale stores look for. Block usage data is only shown on 3.0 and below. (Felica Dude)

The Apple Pay gatekeeper role
From a usability and privacy perspective, Apple wipes the floor with Osaifu Keitai, as you would expect from an Apple product. Apple Pay is designed from the ground up to protect users from complexity by tying everything to the user Apple ID. When the user signs out of Apple ID, Wallet app contents are moved to iCloud and the iPhone secure element data is instantly wiped clean. No messy 3rd party app accounts to deal with.

Apple can do this because they ‘own’ the custom embedded secure element on their devices. They are the gatekeeper with in-house key servers that Apple Pay servers use to load card applets into the user’s Wallet app. They maintain and update the basic protocols (EMV, Mobile FeliCa, MIFARE), etc.) and take care of Wallet card housekeeping. It’s something Google Pay can’t do in Japan because it’s only a candy wrapper over the gnarly old Osaifu Keitai stack ultimately ‘owned’ by FeliCa Networks.

Does the EU want to foist the current state of Osaifu Keitai-like complexity and potential security problems on iPhone users in the name of ‘open NFC’ with a bunch of different NFC owners pulling in different directions, apps occasionally stepping on othe app NFC toes? Because that will be the reality, though people who want to eliminate gatekeepers will surely write it all off as a ‘Japanese galapagos’ thing or a FeliCa thing because it doesn’t serve their self-interest. It would be a darn shame if iPhone are forced learn the Osaifu Keitai lesson the hard way.

Related post: The Apple Pay monopoly debate part 1: context is everything