[UPDATE] Apple Pay’s Destiny In Taiwan Remains Uncertain

[UPDATE] Apple Pay’s Destiny In Taiwan Remains Uncertain
Photo Credit: Shinya Suzuki @Flickr CC BY-ND 2.0

What you need to know

People using Apple products have been expecting the introduction of Apple Pay in Taiwan; however, the implementation is still pending due to several obstacles.

Translated and compiled by Yuan-ling Liang


On May 11, Premier Chang San-cheng stated that the Executive Yuan has approved Apple Pay’s business in Taiwan and that Token Service Providers (TSP) should not be limited to Taiwanese operators. Chang says that Taiwanese people’s mobile payment habits should be developed and the TSP businesses in Taiwan can also be promoted under this policy.

Token service, also known as the Security Token Service (STS), refers to a new type of mobile payment method that helps protect customers’ personal information. Clients who purchase items with their credit cards do not need to sign their names or provide a confidential number. Electronic tokens are provided to the purchasers by TSPs and consumers can then use the tokens to make other purchases. Currently, companies that provide the Apple Pay service include MasterCard, American Express and Visa (Visa Token System, VTS).

Banks in Taiwan are currently planning to cooperate with international platforms such as MasterCard or Visa. By the end of this year, consumers who have an iPhone model newer than iPhone 6 and a system newer than iOS 8.1 can enjoy the service. All users need to do is to place their fingers on the home button to access the payment system through fingerprint identification.

The Financial Supervisory Convention (FSC) has been wary that the method Apple Pay uses may cause several problems. The documented user information may be revealed overseas and may harm domestic financial operators. Also, if the host computer isn’t in Taiwan, it would be hard for the government to identify the exact location of transactions, which could lead to legal disputes.

Several TSPs, such as Visa, say that the system just uses a different payment process, and it does not affect the transaction reconciliation procedure. TSP businesses do not own consumers’ personal information.

[Update ends]

Since this February, there have been rumors about Apple Pay being introduced to Taiwan before May. However, on March 21, Weber Chen, director of emerging products at Visa’s Taiwan branch, stated that since Apple Pay requires the Visa Token Service (VTS) in order to work, whether Apple Pay could be introduced to Taiwan depends on the cooperation of banks in Taiwan.

The Visa Token Service (VTS) is a technology that helps consumers acquire their credit card numbers with a set of 16 tokens. By replacing the original credit card numbers with the tokens, privacy of the credit card owner would be concealed. Under this transaction model, either paying by mobile phones, tablets, or even IoT (Internet of Things), consumers’ personal identifications and other information are under protection.

Apple Pay is the first field that the VTS is used in. However, there are no banks applying the technology in Taiwan currently. Although the Host-Card-Emulation (HCE) mobile credit cards already exist, it does not require VTS technology.

Chen says he is not sure if Apple will introduce Apple Pay to Taiwan. “If no bank supports the VTS technology, Apple Pay will not be able to work in Taiwan even if Apple is willing to bring it into Taiwan,” says Chen. Also, in addition to the construction of the technology in Taiwan, local regulations would need to be drafted for the operation to become legal.

Edited by Kelly Lai and Olivia Yang

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