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 likely doesn’t need the secure element 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.
The piecemeal MTA OMNY rollout is a lesson how not to do a transition from old system to new system. A case where poor design, poor management choices and unanticipated user interaction, each insignificant in isolation, snowball into a nagging long term problem.
The problem goes like this:
(1) Apple Pay Express Transit is opted in by default and iPhone users don’t always know it’s on. They don’t care about using Apple Pay credit cards on OMNY anyway because fare options are limited and OMNY isn’t installed everywhere and won’t be until at least the end of next year. They use good old MetroCard and put iPhone away in the right pocket or purse carried on the right shoulder.
(2) When the user gets to a OMNY fare gate they swipe MetroCard with its peculiar forward swipe motion on the reader which is located above and behind the OMNY NFC reader, which is positioned low and angled at pocket level. As “MetroCard sucks, it may take several (forward) swipes to enter”, the user leans into the gate while doing this and boom: OMNY reader activates iPhone Express Transit and charges fare without the user knowing it.
Default opt in Express Transit has been with us ever since Apple Pay Suica arrived in 2016. But transit cards are not credit cards and everything was fine. Things got sticky when iOS 12.3 introduced EMV Express Transit that uses bank issued credit/debit/prepaid cards for transit on Apple certified open loop systems. Currently these are Portland HOP, NYC OMNY and London TfL.
HOP and TfL don’t have problems with Express Transit. Both systems use contactless exclusively. HOP has stand alone validators, not gates. TfL gates have the NFC reader located on the top. OMNY on the other hand will have MetroCard swipe cards around for years to come: the OMNY transit card replacement is still in development with no release date. With the slow transition pace and current gate design expect the OMNY Express Transit problem to be around until MetroCard is dead, and OMNY is complete with the new tap only card.
In retrospect MTA should have done it this way: (1) rollout out the OMNY card MetroCard replacement first and add open loop support as the very last thing, (2) design better OMNY gates in two kinds, dual mode NFC + swipe, and single mode NFC only. This way MTA stations could do what JR East stations do: start with single mode tap only express gates on the edges and dual mode gates in the middle. As the transition progresses the dual mode gates get fewer and pushed to the sides with single mode gates taking over.
Apple could help by keeping automatic Express Transit opt in only for native transit cards (Suica, SmarTrip etc.). EMV Express Transit should always be a manual opt in. I understand Apple’s perspective: they want to present Apple Pay Express Transit as a seamless one flavor service, not good/better/best Express Transit flavors. The reality however is that the current technology powering EMV open loop fare systems isn’t up to native transit card standards. Apple can’t fix that.
Unfortunately MTA has taken the dumb path of blaming Apple instead of fixing their own problems. New York deserves a world class modern transit system, OMNY is an important step in building one. MTA management performance so far doesn’t inspire much confidence. Let’s hope they focus on the rollout and deliver it without more delays or problems.
A while ago Apple Pay just stopped working on my iPhone X. My phone simply hasn’t been detected by any NFC readers I’ve tried. At this point I finally have some spare income and would like to invest in fixing it. I don’t particularly care how involved it is, but I just can’t find any information on where the actual NFC antenna is and if it has the same lock that the face ID sensors do. I’m sorry if I’m just missing some fairly obvious information here. I would just like to be able to use Apple Pay again.
The Express Transit user base has greatly expanded in the US with the rollout of Apple Pay SmarTrip and Apple Pay TAP. Some iPhone X users invariably discover that iPhone X has problems using Express Transit and consider getting it repaired. iPhone X AppleCare is expired for most people at this point, getting iPhone X NFC repaired isn’t cheap…or easy.
I’ll cut to the chase: unless you love spending time and money repairing the notoriously difficult to repair iPhone X, I strongly urge you get a replacement from Apple if you can, or better yet upgrade to iPhone SE. The NFC just works and Touch ID is much better than Face ID when navigating the outside world wearing a face mask. You also get A13 Express Transit power reserve and background NFC tag reading that works great with iOS 14 App Clips. Altogether a much better Apple Pay package for our COVID face mask era.
The recent Bank of Yokohama Hama Pay app update created some buzz with the addition of an Apple Pay iD Prepaid card option. It’s similar to the Toyota Wallet approach: the bank app links the user’s bank account to an open front end bank payment service with QR code payment for debit and credit and NFC payment for prepaid.
The difference with the Hama Pay prepaid card is that VISA JP issues the iD card which means it cannot be used internationally the same way that the Toyota Wallet Mastercard iD card can; Mastercard supports iOS NFC switching, VISA JP does not.
Another weird thing: the Hama Pay ad blurb uses the ‘Touch Payment’ branding phrase with iD. Up until now VISA JP reserved that exclusively for EMV contactless card issue but not for FeliCa cards, which of course iD is. Does this mean VISA JP will finally sign with Apple Pay? Probably not.
This represents a big evolution of Apple Pay from NFC only to an open front end approach that includes NFC, Code payments and Ultra Wideband. It will be very interesting to see how bank apps evolve in the iOS 14 era as we move away from the plastic era ‘A vs B’ mind set to the bewildering variety of ‘A~Z take your pick’ era of mobile payments. We still have the Apple Pay/Face ID with face mask passcode nonsense…but that’s another post for another day.
Now that the CASHLESS Rebate program is over with transaction rates reportedly going back to ‘normal’ (an estimated 1% rise over rebate program rates), JP media outlets report that some smaller merchants might go back to cash to keep profit margins intact. Real transaction rates are always hush-hush but QR payment rates recently revealed in connection with the Japan QR (JPQR) unified code scheme give us an idea what goes on behind the curtain:
NTT Data already lowered basic CAFIS transaction rates in response to the stera payment co-venture from SMBC-Visa Japan-GMO. As the JPQR transaction rate chart makes clear, banks and payment players have plenty of transaction rate wiggle room. The Japanese government is pushing cashless. If necessary the push will become shove for lower rates and yet another cashless program but where do things stand right now?
July 2020 is the proverbial “X-Day” crossover point: Japan is cashless now, even though the transformation is uneven, ongoing and very messy. On the customer side cashless is the mindset and survival behavior for many Japanese, even for older folks who under normal circumstances would prefer using cash until they day they die.
Faced with the reality of handing money that carries the risk of infection, people are going cashless instead especially with contactless smartphone payments. Junya Suzuki was right all along: Apple Pay turned out to be “the black ship of payments” catalyst that finally nudged Japan from cash to cashless. That and COVID.
Market analysts will undoubtably demand chart data that clearly explains and quantifies the transformation before declaring a ‘winner’ but they have a long wait. That’s because the cashless transformation is sloppy with huge regional variations, all happening right before us. But all of this is an afterthought and our priorities are different now, getting accurate market survey information of any kind in the current environment is extremely difficult.
The Tokyo Olympics was supposed to be the event heralding the cashless era but the COVID crisis has forced much more change very quickly. Evidence is best found in the countless little rituals of daily life that have evolved and are not going back. Merchants who do go back to cash face the risk of fewer customers: when offered a choice people choose cashless.
This realization hit me yesterday when my partner complained about his Docomo dPAY points taking a hit because the Summit supermarket staffer tapped a wrong payment button on the new POS cashless menu options added on July 1. He wanted to pay with iD. A year ago he never used iD, dPAY or Apple Pay and never wanted to, but life changed.
These days I hear contactless reader sounds everywhere, FeliCa chirps and EMV beeps are common as clear plastic sheeting and foot position floor stickers at checkout. And just when posting this the Ministry of Land, Infrastructure, Transport and Tourism announced that Japanese Expressways will be going cashless only with ETC. If there’s anything that defines this sea change it is this: it’s not a ‘victory’ over cash that the media sometimes depicts, nor does it feel like progress. In the COVID era it merely feels like survival.