roaring success in Japan
In April 2006 Japan’s largest mobile phone service provider,
DoCoMo, became the world’s first mobile phone operator to offer its
own branded platform for mobile phones incorporating a credit card
and a contactless payment capability. Eighteen months on and
DoCoMo’s DCMX mobile-phone credit cards running on its iD platform
have made significant headway in Japan.
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In October DoCoMo reported that subscribers to the DCMX service
exceeded 3 million and forecast that subscriber numbers would reach
4 million by March 2008. The number of iD contactless payments
terminals stands at 190,000 and, predicted DoCoMo, should exceed
250,000 by March 2008.
For contactless payments using the DCMX, maximum transaction value
is ¥10,000 ($86). Purchases exceeding ¥10,000 require a four-digit
password. The DCMX service is being adopted by taxi companies and,
according to DoCoMo, 10,900 taxis in Tokyo are already equipped
with iD terminals.
The iD terminals utilise Japanese software vendor Sony’s FeliCa
near field communications system. The FeliCa chip enables mobile
devices to store multiple forms of data including bank account
numbers and balances, credit account information, transport service
passes and personal identification. In 2005 two other major
Japanese mobile phone carriers, KDDI and Vodafone KK, also adopted
the FeliCa system for their contactless payments services. Vodafone
KK was acquired by Japanese bank Softbank in May 2006.
The FeliCa system was first adopted by East Japan Railway in
November 2001 for its Suica contactless transit card, of which
about 17 million are now in use. The system is also used by Bank of
Tokyo-Mitsubishi and other transport service providers in Japan,
China, India, Singapore, Hong Kong and Thailand. According to Sony,
the transaction process between the reader/writer and the card is
completed within 0.1 seconds.
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By GlobalDataDoCoMo has plans to take mobile phone-based contactless payments
into a new era. It has unveiled a mobile phone that would permit
contactless payments to be made without removing the phone from a
user’s pocket. In essence, the mobile phone incorporates a sensor
that transmits electric signals through the body, enabling
transactions to be executed literally at the touch of a
finger.
The concept is, however, far from being commercialised as, noted
DoCoMo, several years of research are still required. Potential
demand for the device is also uncertain.
