Japan: DoCoMo Drives Nationwide Rollout of Contactless Wallet Phones
NTT DoCoMo launched its Osaifu-Keitai, or contactless wallet phones, in July 2004, mainly as a platform for its ambitious plans to establish a new payment brand in Japan via its phones. DoCoMo and its two major telco competitors have made Sony’s embedded FeliCa contactless chip a default feature in most of their models. About half of Japan’s more than 100 million subscribers carry the FeliCa phones, capable of supporting a host of applications--from several brands of contactless e-money to transit ticketing, loyalty and airline check-in.
DoCoMo’s gamble on contactless wallet phones has yet to pay off, despite the impressive numbers of contactless phones, mobile applications and acceptance points. Transactions figures showing how much Japanese subscribers use the phones are hard to come by. Some estimates put regular use at about 10%, though more tap their phones to pay on a less frequent basis. Consumers can tap contactless cards on the same terminals. Sony’s proprietary technology, FeliCa, increases costs for contactless cards and phones, as well as readers, and prevents expansion outside of Japan. That’s a situation that even DoCoMo wants to escape by eventually moving to NFC in Japan. This is despite the large share of the licensing and application management organization it owns with Sony and JR East, FeliCa Networks. DoCoMo’s competitors KDDI and Softbank Mobile are even more keen to move to standardized NFC.
* Trusted Service Manager: Defined loosely to include companies or other organizations securely distributing, provisioning and managing applications, generally over the air, on secure elements in NFC mobile phones; or licensing their platforms for this purpose.
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