More Smart Octopus

I assumed the Smart Octopus Coming to Apple Pay post would be ignored in the end of year rush period. However the timing perfectly coincided with an Octopus Cards Limited press conference where the CEO demurred any Octopus tie-up with Apple and the post got much more attention than I ever anticipated. Obviously there are lots of iPhone users in Hong Kong who want Smart Octopus Apple Pay. A few readers were confused by the situation and asked for some clarification.

First of all the source who correctly predicted last years Smart Octopus on Samsung Pay launch tipped me about the Apple Pay launch. That in itself was enough for me but here’s the thing: if Octopus Cards Limited (OCL) is really serious about expanding Octopus use on mobile platforms, taking the next step of getting Smart Octopus on Apple Pay is the only way to achieve that.

Digital Wallets like Apple Pay and Samsung Pay are the most tightly integrated NFC software and hardware digital wallet platforms out there with integrated FeliCa, but Apple is the only one to implement the necessary Secure Element on their own A Series/S Series hardware with FeliCa Networks keys, and sell the package globally. All the major NFC technologies are standard on Apple Pay: NFC A-B-F, EMV, FeliCa, MIFARE, VAS.

Smart Octopus on Google Pay might look nice on paper but it can’t achieve anything of scale yet because of the highly fragmented nature of Android: to date hardware manufacturers have yet to produce an answer to Apple’s global FeliCa iPhone and Apple Watch, even though everybody’s smartphone has a NFC A-B-F chip. Not even Google has pulled it off. Huawei says they are planning to add global Felica but it will take time.

OCL is playing coy because majority shareholder Hong Kong MTR has added QR Codes and EMV contactless to the transit gate mix removing the exclusive Octopus Card franchise, but the technology and market politics don’t mesh. On one hand you have a fast, established and ‘open’ in-house contactless payment system (as in anybody can buy a plastic Octopus card and ride) basically run by public transit companies. On the other hand you have slow and ‘closed’ contactless payment systems (as in only people with certified credit cards and bank accounts can ride) run by major outside credit/debit network companies chipping off money from both customers and transit companies.

In this context putting Smart Octopus on Apple Pay isn’t just adding a card to a digital wallet platform, it is also a statement of who ultimately controls, operates and benefits from the public transit gates. It’s more about market politics than technology, in other words another battle in the contactless payment turf wars. The outcome will be fascinating to watch but determines whether Octopus will remain a great transit payment platform for Hong Kong with a future, or not.

Update
It looks like we’ll have to wait a while longer for Smart Octopus on Apple Pay.

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Pixel 3 FeliCa details and Google Pay roadmap

Note: I’m updating and consolidating everything here instead of separate posts

Pixel 3 FeliCa related information is trickling in as devices get ready to ship. Pixel 3 details will give us a good idea of the Google Pay roadmap and answer some lingering questions:

  • Do Pixel 3 JP models have a Google custom FeliCa embedded Secure Element (eSE) implementation or use Sony FeliCa chips, and is the hardware the same across all SKUs?

The Pixel 3 JP models have a different hardware configuration. Google did the quickie solution of sticking a FeliCa chip in it, i.e. one Pixel 3 hardware configuration for Japan, another Pixel 3 hardware configuration for everywhere else. Not exactly the elegant long term vision thing that does not bode well for a global FeliCa Pixel 4: if Google is not creating its own custom Embedded Secure Element (eSE), the prospects of a global FeliCa Pixel next year are dim.

On the plus side Express cards with power reserve are a given as this feature already exists on Android Osaifu-Keitai smartphones with FeliCa chips. The down side is that this means Google Pay on Pixel 3 is exactly what it is on Android Osaifu-Keitai: a candy colored UI wrapper around the Osaifu-Keitai stack, an alternative front end. All icing, no cake. You get what Google Pay Japan supports but you have to add missing pieces like iD on your own. Even worse Pixel 3 apparently locks users into SIM free MVNO Osaifu-Keitai apps and their limitations, i.e. full Docomo iD support cannot be added.

  • Does Google Pay in Pixel 3 Japanese SKUs implement NFC switching?

iOS 10 didn’t have NFC switching support and was a big reason that Apple only activated FeliCa Apple Pay in the Japanese iPhone 7 and Apple Watch 2 models. NFC switching was necessary to support Global FeliCa iPhone 8 and later/Apple Watch 3 and later so that users could mix different card types (EMV, FeliCa, China Transit) in Wallet and have it all ‘just work’. If Google Pay does not support NFC switching then we have another reason why Pixel 3 is not global FeliCa.

  • Does Pixel 3 have express cards with power reserve?

As noted above Pixel 3 JP SKUs have a dedicated FeliCa chip like any other Japanese Android Osaifu-Keitai smartphone out there, the answer is yes.

Update: iFixit posted a Pixel 3 teardown, content and title updated

Update 2: the hardware for Pixel 3 JP SKUs has a dedicated FeliCa chip, major rewrite.

Update 3: Google Pay Japan on Pixel 3 is ‘pure’ Google Pay with the current limitations like no iD support and only allows installation of the ‘SIM Free MVNO’ version even on Pixel 3 devices from Docomo.

Pixel 3 FeliCa and iPhone X Suica problem switchers

iPhone X Suica problem switcher
a iPhone X Suica problem switcher

That didn’t take long. A few hours after the Pixel 3 announcement with confirmation of FeliCa models for Japan, iPhone X users like this one are ready to dump their iPhone X Suica problem devices for a shiny new Pixel 3.

Apple doing nothing about the iPhone X Suica problem in Japan is a dangerous proposition that’s gives Google a wonderful business opportunity. The danger is that Apple does not realize that Japanese users are the savviest NFC users in the world: Suica and Osaifu-Keitai smartphones have been around a long time, far longer than Apple Pay Suica. Even if Japanese users know nothing about the iPhone X Suica problem, they immediately and instinctively know a NFC lemon device from a good one.

Forcing NFC savvy Japanese iPhone X users to stumble in the dark and deal with the Apple Support “we have never heard of the iPhone X Suica problem” runaround is terrible short term get-rid-of-the-problem vs. long term vision thinking. I guess it means that Apple is OK giving Japanese business away to Google and that giving away some business is less expensive than fixing a problem. Anyway you look at it I think the current approach is a mistake but especially so in the Japanese market.

Pixel 3 FeliCa (U)

JCB added their FeliCa QUICPay payment network to Google Pay yesterday, a sure sign that Pixel 3 has FeliCa. This narrows down the possibilities I outlined in the previous post:

1) Pixel 3 does not support FeliCa: this is unlikely given how much Google has advertised in Japan and would kill the Pixel brand in Japan forever.

2) Pixel 3 does the iPhone 7 thing and only supports FeliCa on Japanese specific SKUs: this is more likely but will piss off Android fans outside of Japan.

3) Pixel 3 does the iPhone 8 thing with a global FeliCa Pixel 3: most people will be happy and inbound Android users can finally join the Mobile Suica party.

4) Pixel 3 does the iPhone 8 JP global FeliCa but TD‑LTE Band 42 support is JP carrier exclusive: MVNO fans will be frothing at the mouth and cursing at the wind.

5) Pixel 3 does the iPhone 8 global FeliCa thing with TD‑LTE Band 42 JP SKUs both in SIM-free and select carrier locked arrangements: this would be the best outcome for MVNO users and for actually selling some product.

#5 is best but #3 and #4 will do.

Update: too bad global FeliCa fans, Google did the #2 iPhone 7 Japan SKU only FeliCa thing. The only questions left are what’s the embedded SE arrangement (eSE) which can give us a clue about Google’s NFC roadmap, and whether Pixel 3 JP FeliCa has Express cards with power reserve like iPhone XS/XR. Probably not.

Update 2: Looks like Pixel 3 uses a custom eSE for FeliCa.

Squeeze me: top Pixel 3 questions for Japan

Google Japan has been advertising the upcoming Pixel 3 announcement on social media. Users burned by the Pixel 2 scorch and burn FeliCa non-support debacle are hopeful that Google has seen the error of its ways and that Pixel 3 will deliver proper FeliCa support. There are some possibilities:

1) Pixel 3 does not support FeliCa: this is unlikely given how much Google has advertised in Japan and would kill the Pixel brand in Japan forever.

2) Pixel 3 does the iPhone 7 thing and only supports FeliCa on Japanese specific SKUs: this is more likely but will piss off Android fans outside of Japan.

3) Pixel 3 does the iPhone 8 thing with a global FeliCa Pixel 3: most people will be happy and inbound Android users can finally join the Mobile Suica party.

4) Pixel 3 does the iPhone 8 JP global FeliCa but TD‑LTE Band 42 support is JP carrier exclusive: MVNO fans will be frothing at the mouth and cursing at the wind.

5) Pixel 3 does the iPhone 8 global FeliCa thing with TD‑LTE Band 42 JP SKUs both in SIM-free and select carrier locked arrangements: this would be the best outcome for MVNO users and for actually selling some product.

We’ll find out on October 9.

Update: results here