iOS 14.3 is the big coming out party for App Clips now that App Clip Codes are in place. Apple posted App Clip Code HIG documentation, App Clip Code Generation tools and more. There are lots of interesting tidbits and 3 ways to engage:
iPhone XS and later models with NFC reader mode: “The NFC-integrated variant uses an iPhone icon at its center that guides people to hold their device close to the App Clip Code.”
Pre iPhone XS models without NFC reader mode: “scan it using the NFC Tag Reader in Control Center.”
All iPhones using Camera app or Code Scanner: “scan-only variant uses a camera icon in its center to let people know to use the Camera app or the Code Scanner in Control Center to scan the App Clip Code.”
The guideline also states, “for NFC-integrated App Clip Codes, choose Type 5 NFC tags.” Type 5 tags are ISO 15693/NFC V used for library books, medical packaging, ski passes etc., but choose instead of use is a recommendation not a rule. Core NFC lists ISO7816, ISO15693, FeliCa, and MIFARE tag support. NFC Forum Tag definitions are:
So why is Apple going to all this trouble to market App Clip Codes? They could have done it all with QR Codes and NFC tags but App Clips are mini apps, App Store quality apps without the App Store. The branding of App Clip Codes defines a different and unique user experience. The NFC reader mode App Clip experience is slick ‘point and run’ fun, but the 2 for 1 ‘scan only or NFC embedded’ in one App Clip Code is practical: (1) physically accessible and close = NFC, (2) physically inaccessible or far away = code scan.
There will be many different App Clip user experiences running from general app launches to specific actions. Based on my Kitasando Coffee App Clip experience I would say, the quicker and more focused the App Clip experience, the more likely the user will use it again or go in for the full app. Apple’s HIG documentation emphasizes clarity and simplicity…good advice.
New iPhone specs are always fun to compare and analyze. On the NFC front we have a few changes in iPhone 12. NFC is now listed twice, first in the Cellular and Wireless section as “NFC with reader mode,” and again the MacSafe section as “Accessory Identification NFC.”
The keynote also shows NFC twice: once using iPhone 12 to unlock a door and again in the MagSafe section as a ‘single-turn coil NFC.’ So there we have it: the good old Apple Pay NFC antenna with embedded Secure Element for transactions where it has always been on the top of iPhone, and a new MagSafe NFC antenna for tag reading MagSafe accessories on the back that doesn’t need a secure element for card emulation transactions and might incorporate the NFC Forum Wireless Charging Specification. Hopefully Apple will release MagSafe developer documentation later on so we can find out. Some users wondered if the new MacSafe NFC would interfere with 3rd party card cases and using Apple Pay, but this doesn’t seem to be the case, no pun intended.
When the AliPay Apple Pay leak surfaced earlier this year the stock story was that Apple Pay must support AliPay and WeChat Pay if Apple Pay is to have any relevance for iPhone users in China. The real story is more interesting and is centered on App Clips, not AliPay or other specific QR code payment players.
Tap or Scan Simplicity The strength of code payments is simplicity and low cost. iPhone is both a radio (NFC) and camera (scanner). NFC always has an advantage over a scanner in that it works without light and can be activated just by the user pointing their device at an NFC reader or tag.
The downside is the NFC reader side of the equation: the reader + cash register/transit gate + transaction software has a higher initial investment than a code scanner attached to a POS system. The promise of App Clips is they finally put NFC, specifically NFC tags, on the same low cost entry bar of QR codes.
App Clips are activated by:
App Clip Codes
Safari App Banners
Links in Messages
Place Cards in Maps
Let’s examine the ‘real world’ App Clip activation triggers: Apple App Clip codes, NFC tags, QR codes. For Apple designed App Clip codes, “You can scan them with your camera or tap one using NFC.14” The #14 footnote is interesting: “Camera support for scanning an App Clip code will be made available in an iOS 14 software update later this year.”
This means those fancy Apple designed App Clip codes are coming after the initial iOS 14 launch, and when they do Apple Pay Code Payments will certainly be coming with them. It boils down to one thing: making App Clips a simple tap or scan process. NFC tags still enjoy the ’point here’ advantage as App Clip does the rest. For visual codes the user has to launch the camera and scan before App Clip takes over.
The Code Payment/App Clip Network Connection Requirement Apple Pay Wallet NFC payment cards have 3 major features that payment apps do not:
Direct side button Wallet activation with automatic Face/Touch ID authentication and payment at the reader
Device transactions without a network connection
Ability to set a default main card for Apple Pay use
Apple Pay Code payments can possibly offer this for dynamic code payments where a scanner reads the code off the iPhone screen. However, static code payments are messy because Apple Pay requires a network connection to process the payment just like apps do. In the Apple Pay code payment scenario suggested by the AliPay screenshot leaks, a static code scan directly activates the appropriate Apple Pay code payment (AliPay, etc.), the user enters the amount, taps ‘Pay’, authenticates, and Apple Pay does the transaction via the network connection. It’s a similar scenario for NFC tag payments.
It’s because of this network connection requirement that I believe Apple is pushing Apple Pay NFC tag and code payments wrapped in the App Clip experience. They will work by themselves of course, but they work better as part of the total App Clip experience. This is where App Clip codes come in.
App Clip codes are Apple-designed identifiers that are uniquely paired to specific App Clips and provide an easy way to find and launch an app experience at the exact place and moment you need it. You can scan an App Clip code with your camera or by tapping one using NFC.14 We will be adding support for them in an iOS 14 software update later this year.
How is this any different from regular NFC tags or QR codes? I suspect it’s a mini qualification program for developers, payment providers and merchants to supply the ultimate App Clip experience. It also works as App Clip branding and advertising for Apple.
Are there special App Clip code tags that push the App Clip experience further than regular NFC tags and QR? I suspect so and that could be fun. Think about it, what if the Apple designed App Clip code NFC tag activated an App Clip with code payment. A QR payment without the static QR code. That would be the ultimate App Clip experience indeed.
Ruimin Yang’s detailed and thoughtful post, “Apple Pay monopoly, are we really comparing ‘Apples’ with ‘Apples?“, outlines the entire Apple Pay system architecture, how it compares to other digital wallet platforms, (Google Pay, Samsung Pay) and what ‘open vs closed’ means in the whole ‘Apple Pay is a monopoly’ debate. I highly recommend it if you have any interest in digital wallet payments.
As Yang explains, ‘open’ is not easily defined and the options are not easily implemented, especially when it comes to Apple’s highly customized and constantly evolving Apple Pay platform built around their A/S series chip Secure Enclave and Embedded Secure Element. Apple has spent a lot of time, money and effort in building the Apple Pay brand as the high benchmark standard for secure, private and easy to use digital wallet transactions and services. It is not your standard off the shelf NFC + Secure Element package.
It is telling that Germany, a country with one of lowest rates of credit card use and whose banks fought to keep Apple Pay out, is pushing for ‘open NFC’ the most. It sounds like a industry broad development but it’s really aimed at Apple Pay.
This is European business politics in the age of digital wallet wars: mobile payments and digital wallets have disrupted everything and the traditional players, banks and card companies i.e. the real gatekeepers, are doing everything they can to keep the upper hand by using the open NFC argument to force their own branding on Apple’s platform in place of Apple Pay.
In the European tradition, regulation is invariably the go to strategy for keeping the status quo. I still think Junya Suzuki has it right: the EU would never demand the same thing of Samsung or Huawei that they are demanding from Apple. In other words, politics.
A reader pointed out that I was wrong. iOS still uses the PassKit Suica Shinkansen call with Eki-net eTickets and Notification Center throws out the same ‘Shinkansen’ Suica Notification when the user goes through a JR East Shinkansen gate with a cloud based eTicket.
The eTicket cloud service interaction with the local Apple Pay Suica card on iPhone offers some insight into what JR East (JRE) is up to as it closes in on the next generation ‘2 in 1’ Suica architecture due for release in spring 2021. JRE has said many times and in many ways that the future of the Suica platform will combine cloud services with the fast local processing of the FeliCa powered Suica architecture. However, details are few, with different pieces dribbled out in bits.
What’s the overall vision and goal of next generation 2 in 1 Suica, which I call Super Suica? There’s a lot of ground to cover so let’s examine things in 2 basic categories: the card architecture (offline and local) and the platform (cloud) even as those distinctions are increasingly blurred. Here is my take based on what JRE has announced so far.
Super Suica: the Transit Card
The next generation ‘2 cards in 1’ Suica architecture hosts partner transit cards and services on Suica infrastructure, effectively extending the Suica system to non-JRE transit companies. 2 in 1 partner transit cards gain the benefit of Suica hardware and Mobile Suica infrastructure with considerable cost savings related to plastic card issue and management. The heart of Super Suica remains the offline stored fare. JRE hopes to grow Mobile Suica cloud services as much as possible with the lower cost next generation Super Suica architecture and a Cloud Suica backend system.
Stored Value Update, Region expansion and Commuter Pass Changes Starting with the basics, it’s a no-brainer that Super Suica will raise the current ¥20,000 stored value limit, likely doubling it to ¥40,000. This would put it in line with other eMoney prepaid cards like WAON and nanaco, also similar to the recent Hong Kong Octopus stored value update. The increase would have broad appeal to tourists, business travelers and shoppers everywhere and extend the JR East ‘Touch ‘n Go” ticketless Shinkansen service area.
A long standing hurdle for Super Suica to clear is the transit IC card region limitation. The current Transit IC system uses unique fare regions for each card (Suica, ICOCA, TOICA, etc.) and the stored value doesn’t work across fare regions. Transit systems within the same card region such as JR East and PASMO have their fare systems connected so that a user’s transit card can enter a JR East station then exit a PASMO member station with the fare instantly calculated and deducted from the offline card balance.
This region limitation is a problem for transit users in fringe areas. In order to use an IC transit card they have to exit and re-enter separate transit company gates at specific transfer station points. The only viable cross region options have been mag strip commuter passes or paper tickets.
2 in 1 Commuter Passes In September 2019 JR East, JR Central and JR West announced new cross region commuter pass rules going into effect in spring of 2021, exactly when Super Suica arrives. The new cross region transit card commuter passes cover cross region regular train transit up to 300km.Superficially the changes are about making cross region local to Shinkansen transfers easier for commuters, but the timing, and the necessity of issuing brand new cards for cross region commuter passes suggests other changes are coming.
The ‘2 in 1’ Super Suica concept has special meaning for commuter passes. The current Suica only supports 2 basic patterns via a card id commuter pass account number: JR East only lines, and connected commuter passes covering JR East and connecting lines. 2 in 1 Super Suica will support 2 separate commuter passes: one hosted by the non-JR East transit partner for rail and bus lines and one hosted by JR East.
Super Suica: the Platform
One primary aim of Super Suica is extending the platform reach with shared infrastructure to rural areas too small to establish their own local transit cards. Pay close attention to the transit cards outside the pink area, with the exception of PiTaPa. These are 2nd tier local area transit cards currently orphaned from eMoney or transit interoperability. There are also ‘off the map’ areas such as Utsunomiya Light Rail and Iwate Transit Co. Ltd. who have announced Super Suica 2 in 1 agreements with JRE.
Super Suica enlarges the pink area to include those 2nd tier and off the map cards. Those who sign on join the common interpretability area for transit and eMoney, and also gain access to Mobile Suica hosted Apple Pay Suica, Google Pay Suica and Osaifu Keitai. This is a real boon for smaller areas who, up to now, couldn’t afford to launch their own card operations. I suspect it will be very attractive to all transit card operators who run on shoe string budgets, they can save money by offloading card operations to JRE and get the mobile support in the bargain.
What does Super Suica mean for the major transit cards like JR West (ICOCA), JR Central (TOICA) and others? It depends on what kind of deal JRE offers them. Even if the majors don’t sign on directly I see them getting access to the new Suica card format and Mobile Suica IT assets.
2 in 1 Reward Points and Auto-Charge In addition to the 2 in 1 commuter passes, Super Suica also supports different reward point systems. ‘2 in 1’ partner Super Suica users will be able to exchange points for a Super Suica recharge just like they do now with JRE POINT and Rakuten Pay points. Auto-Charge for 2 in 1 partner branded credit cards will certainly be supported as well. Points and Auto-Charge may seem mundane but they are very important to customers and transit companies, a vital part of luring foot traffic, new businesses and visitors to local areas in an era of shrinking passenger traffic.
Expanding and leveraging the Recharge Backend The ever expanding Mobile Suica recharge backend is a fascinating development mostly ignored by the media even though it’s where the action is. Suica and the other transit cards are a huge green pasture full of cash (less) cows waiting to be milked by card companies and payment platforms. JRE lets them milk Mobile Suica cows for a cut. Up until Apple Pay Suica came along in 2016, JRE was the only recharge backend. As of July 2020 there are 5: JRE, Apple Pay, Google Pay, Mizuho, Rakuten. 2 in 1 partners will have the ability to add their own recharge backends with apps, if they so choose.
Other points to remember: the recharge backend only works on iOS and Android platforms, point rewards can be used for Suica recharge. Currently that only works with JRE POINT and Rakuten Points but this will be extended to the ‘2 in 1’ partner point systems.
MaaS NFC Tag Suica It’s clear that the really big Super Suica changes will be on the cloud side. Transit card eMoney has been a huge success, but Suica has to evolve to remain a viable payment platform in today’s hyper competitive world of mobile payments.
That next step is Suica NFC Tag payments. Think of it as Suica transactions without a reader, let’s call it MaaS Suica. JRE joined the MaaS alliance in November 2019 closely followed by an December 2019 press release announcing NFC Tag tests with 4 partners: JRE (Suica), DNP (NFC Tags), Sony (FeliCa) and AquaBit Spirals (NFC Tag SmartPlate payments software).
JRE & us (AquaBit Spirals) have announced to conduct technical verification for the use of NFC tags focusing on transportation and ‘payments’, and that the role of Sony is to investigate technical specs as part of promoting a lifestyle through ‘FeliCa’ tech. You may know what we mean😉
AquaBit Spirals CEO Tomohiro Hagiwara
It’s clearly implied by the diagram and by comments from AquaBit Spirals CEO Tomohiro Hagiwara that Suica powers the NFC Tag payments middle section via the cloud. This means the Suica card balance on a device works ‘over the cloud’. Suica is unchained from the NFC reader infrastructure and can be used to pay for any kind of NFC Tag linked service or item. This is still a pilot test program but has connections with the Cloud Suica system JR East is planning to roll out.
NFC Tags and App Clips level the playing field with QR One of the ways PayPay and other QR Code players disrupted the Japanese market so quickly was leveraging the low entry point bar of static QR codes combined with mobile smartphone apps. All stores need is an official QR Code sticker. Small merchants are freed from having to invest in POS hardware to go cashless.
The pieces appear to fit very nicely now: the NFC background tag sheet pops-up ‘while the screen is on’, the right code snippets load in for a simple focused task, the user can Sign In with Apple ID if needed, and pay with Apple Pay. Simple, uncluttered action; no apps, no Safari launch. And we have background NFC tag reading on every current iPhone model.
MaaS Suica wrapped up in new technologies like App Clips and background tag reading iPhone has the potential to take the Suica eMoney payment platform to a whole new level. Success depends on how aggressively JRE promotes the service and how they license it to sister transit card operators. It would be great if we got MasS Suica, MaaS ICOCA etc. working seamlessly as a single mobile payment just like transit cards do now.
Based on what JRE has said over the past 2 years in the press and in recent company announcements, it seems we’ll have 4 basic versions of Suica: (1) Hard-wire Suica (what we have now) for major stations and stores, (2)Cloud Suica, lower cost cloud based fare processing for transit gates that cover rural stations not currently on the Suica map, this cloud backend is also expected to power closed loop QR code ticketing (3) MaaS NFC Tag Suica powered by the Suica Cloud backend for reader-less App Clips-like mobile payments, (4) Licensed Mobile Suica assets and card architecture for PASMO, ICOCA and other partners.
Indirect partners get the new Suica card architecture, New FeliCa OS improvements, Mobile Suica IT assets and wireless Suica gate system technology. The arrangement will be similar Mobile PASMO who licensed Mobile Suica IT assets but run their own cloud service with their own backend mobile recharge, commuter passes and reward points.
Mobile PASMO was first announced in January 2020, launched on Android Osaifu Keitai in March and Apple Pay PASMO with arrive with the iOS 14 update this fall. 9 months is a quick turnaround for announcing and launching an entirely new mobile transit service across 2 digital wallet platforms: Android (Osaifu Keitai) and iOS/watchOS Apple Pay. This speedy rollout was possible because Mobile PASMO is rebranded Mobile Suica cloud assets.
Think of Mobile PASMO as a trial run for the major transit card players following the same strategy and launching Mobile ICOCA, Mobile TOICA, etc., starting in 2021. Next generation Super Suica won’t be a slam dunk national transit card that does it all, but it will be start line towards that goal in a race that has already started: a new foundation of shared infrastructure and services with transit companies working toward a cohesive de facto standard that has lots of mobile potential.
In these COVID challenged times all transit companies are under enormous pressure to reduce redundant infrastructure, streamline and bury old grudges. The current situation will drive Super Suica and mobile uptake as the payoff is more mobile services with reduced operating costs. Another case of COVID driven ‘unfortunate success’. I remain hopeful that, in the end, we’ll be pleasantly surprised.
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