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.
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.
Apple’s strong point is the tight integration of software services across different devices that no other platform can match. Apple Pay Suica works on iPhone and Apple Watch, but the latter combination of technology, function and size makes it a completely different and beguiling experience. Apple Pay on Apple Watch is its own special thing.
A Temporary Split in the NFC Evolution Line? The evolution of Apple NFC on both iPhone and Apple Watch was in lockstep up until the arrival of A12 Bionic in 2018. The A12 Bionic NFC powered background tag and Express Transit power reserve features only work on iPhone XS/XR. Apple Watch Series 4 does not support these NFC features, nor does watchOS support the Core NFC framework, this means that NFC tag Apple Pay on Apple Watch is out of the question.
Is the feature split temporary or does it represent a different line of NFC evolution for Apple Watch? The absence of Core NFC makes sense because watchOS does not support 3rd party apps, at least not yet. Express Transit power reserve however, would be a great feature to have on Apple Watch as iOS 13/watchOS 6 Apple Pay Express Transit rolls out to Chicago Ventra, Brisbane myki and Hong Kong Octopus.
Getting that feature on Apple Watch depends on how quickly Johny Srouji’s A team can implement the A12 Bionic Secure Enclave design that handles basic Apple Pay transactions directly and bypasses the OS, on the S Series chip. I cannot believe they are not pushing hard to deliver the goods as soon as possible, perhaps even with Apple Watch Series 5 featuring a S5 Bionic chip.
Delivering a S5 Bionic would get Express Transit power reserve on Apple Watch with NFC performance gains as well. It would also give Apple the option to add NFC background tag reading later on as watchOS becomes more powerful and independent.
The iPhone 7 FeliCa Question There is one fuzzy area of iOS 13 Core NFC and it is iPhone 7 FeliCa support. At WWDC19 Apple announced that all devices, iPhone 7 and above, would support the enhanced NFC tag lineup: NDEF, FeliCa, MIFARE, ISO 7816, ISO 15693, VAS. But this does not match up with Apple’s own device specs for adding a FeliCa Suica card to Apple Pay:
Apple is telling developers that all iPhone 7 models are good for FeliCa but telling customers that only iPhone 7 JP models are good for FeliCa. This means we get one of two scenarios:
iOS 13 retroactively adds FeliCa support to all non-JP iPhone 7 models. Apple can do this by adding device specific FeliCa keys as iPhone 7 NFC hardware is the same for all models worldwide.
iOS 13 Core NFC FeliCa tags work but non-JP iPhone 7 models (without FeliCa keys) do not work for FeliCa transactions at the terminal.
The latter ‘FeliCa keys vs. No FeliCa keys’ scenario is illustrated in a comment post by Reddit user FelicaDude, if I understand correctly, that without device specific FeliCa keys iPhone 7 only works in basic Read/Write mode without encryption, with FeliCa keys iPhone 7 works in Read/Write encryption mode necessary for local offline processing with payment terminals (i.e. Suica):
The international iPhone 7s can do basic FeliCa read/write without encryption, because they embed a FeliCa-capable CLF <contactless frontend>. Apple has chosen not to provision them with Osaifu-Keitai keys, probably to avoid paying royalties to FeliCa Networks for each device.
No sooner than Apple announced iOS 13 with enhanced Core NFC read/write support than developers are quickly preparing to use it. Engadget Japan and Nikkei both report that the Japanese government will add support for iPhone NFC tag reading Individual Number Cards this fall. Individual Number Cards are a fairly recent development for the Japanese national and local governments to gradually tie various social services and income tax filing to a single personal ID number for better management and control. It’s evolving into a general purpose national ID card.
Individual Number Cards are supported by card readers that require a personal computer and additional software. FeliCa NFC tag reading with a smartphone is much easier because it can work out of the box and an app. Android Phones are supported but limited to select AQUOS, Galaxy and Xperia smartphone models. iPhone NFC tag support in iOS 13 will considerably widen the user footprint.