Apple Pay meet Oyster card
At their big media event Apple announced new iPhones, the Apple Watch and Apple Pay. New iPhones aren't terribly exciting (but I've already ordered mine) and the Apple Watch is intriguing but I'm reserving judgement for now. I was particularly interested in Apple Pay however - even though its unlikely to reach the UK until 2015.
Like it or loathe it, we are increasingly moving towards a cashless society. I hate carrying cash, particularly change. I almost never do. Wherever possible I try to pay with everything by debit card. Its more convenient and it makes it much easier for me to keep track of my spending whereas cash tends to disappear into a black hole (or a pot of loose change). I like having a slim wallet; I only carry two payment cards - my bank debit card and my rarely used credit card. Both support contact-less payments, something I've noticed being accepted in more and more places of late and its incredibly convenient for small purchases which make up the majority of the sort of purchases I tend to make. I even used a London bus with my contact-less payment card for the first time the other day after leaving the house without my Oyster card.
Just a week after Apple's announcement, TFL announced that it is now possible to use contact-less payment cards on London tubes, trains and DLR, in addition to buses which have supported contactless NFC payments since last year. Oyster card readers, which use RFID technology, have been around for over a decade now and TFL have upgraded them to support NFC payments.
I recently mused on Twitter whether or not it would be possible to use an iPhone 6 with Apple Pay with Oyster card readers on the basis that it should work anywhere where NFC is supported (Apple made it clear that existing NFC readers would not need upgrading). We don't know exactly how compatible the iPhone is with NFC readers and we know that it requires co-operation from banks but it shouldn't be something that retailers need to worry about.
I was pretty optimistic that it would Just Work however a tweet from Amy Worrall dampened my enthusiasm. When you use a PAYG (pay-as-you-go) Oyster card on the TFL network, it has daily spending caps that ensures you never spend more than an equivalent daily travelcard. TFL also implements this same cap if you use a contactless payment card which raises the question - how do TFL know how much you've spent?
The only obvious answer is - they know enough about the card you paid with to track your spending. There is further evidence of this - if you sign up for an online account and register your payment card, you can track your journey history just like you can with an Oyster card. Also, ticket inspectors can ask you to touch your payment card against their reader to check that you've paid for your journey.
In all likelihood, TFL use your credit card number to link your purchases although it could be some other kind of unique, yet constant value associated with your card. This makes it fundamentally incompatible with the way Apple Pay works - Apple Pay uses secure, one-time only payment tokens that are generated by a secure chip on the device in conjunction with TouchID for authorization. Apple made a big deal about the security of the system and the fact that neither Apple or retailers will be able to track who you are and what you've purchased.
Because of this it seems unlikely that Apple Pay - whenever it is launched - will be a viable means of payment on the TFL network or any other network that needs to track you in some way.
In the future, I'm hopeful that Apple will open up the NFC technology in the iPhone 6 to developers that allows apps to make use of it outside of credit and debit card payments. With the right APIs, TFL could develop an Oyster card app that lets you use your phone as a virtual Oyster card but one that is a lot more useful - it could show you your balance in real time, it could show you your journey history, allow you to top up your card (using Apple Pay in-app) and much more.