NTT DoCoMo hits 10m mobile wallet accounts

Peter White, Rethink Wireless
26 Aug 2009

NTT DoCoMo says it now has 10 million regular users of its DCMX contactless credit card phones, run under its Osaifu-Keitai service (mobile wallet service).

A subscriber is someone who pays for banking services as well as micropayment use on their phones, and there are many more handsets out there that have the technology installed.

DCMS subscribers can earn DoCoMo loyalty points when they conduct transactions and use them for DoCoMo product discounts and in the carrier’s online shopping mall.

Today, over 30 million DoCoMo customers actually have handsets that contain the Sony-built FeLiCa chips that make near-field communication (NFC) possible. And there are 420,000 readers in retailers nationwide for shopping at convenience stores, electronics retailers, fast food restaurants and even in taxis.

Japan has well over 100 million handsets, of which about 55 million belong to DoCoMo customers, and it introduced the service in 2006, so this is a real indicator for Europe and the US just how slowly a business model for contactless payment systems develops.

A contactless device is one where you can make rapid payments under a certain level (say $20) without using a PIN number, just by putting your phone within 3 cm of a keypad. More expensive purchases above a threshold level require a PIN.

Devices of this type can be used to issue and collect travel tickets, to speed entry to stadiums and entertainment sites, and to make all types of general in-store payments and to run loyalty schemes.

There has been a political battle across both Europe and the US in getting near field communication chips into phones to enable a mobile payment platform. As usual it is all about who pays for the devices and how everyone gets paid.

Banks consistently refuse to concede any percentage of the payment servicing charges to operators; retailers resist because they have to buy new EPOS equipment; handset vendors want to be paid more for their NFC phones; while operators need a clear business model for making money out of the new devices.

Some operators see holding the Olympics in London as an opportunity to get a head start, and offer tickets sales and travel tickets through handsets, while other operators cannot see the business model and are alarmed at the possibility of a sudden rush by users to switch to subsidized NFC phones.

The single-wire protocol at the center of the technology in Europe has acted as an obstacle for some time - a single route in and out of the NFC chip to the other components on a phone - but this standard is now set in concrete and the specification for NFC phones in Europe is now ready.

Nokia in April clarified its position by introducing the first NFC phone which adhered to the standards, the 6216 Classic, a candy bar design, which obsoleted older pre-standard NFC phones made available for trials.

The big difference was that the new phone keeps on the SIM. Previous Nokia designs had implemented their own security chip and this prevented payment systems being built which had a connector between the SIM and the NFC chip.

In Europe this is seen as the key compromise, with the operators owning the SIM card and renting space on it for up to 100 applications from different banks, retailers, loyalty schemes and transport authorities.

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