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mPayments

August 5th, 2005 · No Comments

The Economist writes about NTT Docomo’s plans to enable consumer payments via mobile phones:

Over 4m of its 51m subscribers now carry handsets equipped with FeliCa, a technology developed by Sony that DoCoMo incorporated into some of its handsets last year. FeliCa allows a small chip to be read wirelessly by a nearby scanner. FeliCa-based cards are already used as wireless train tickets by millions of commuters, and from next year it will be possible to use a FeliCa-enabled handset instead.

Why the sideways move into consumer finance? Having withdrawn from unprofitable forays overseas, DoCoMo has plenty of capital to invest and is looking for new sources of growth at home. It also wants to differentiate itself from KDDI, the increasingly competitive number-two operator. (Vodafone is a distant third.) Credit cards are far less popular in Japan than in other rich countries: the average card is used for less than $1,000 of purchases a year, compared with more than twice that in Britain, France, Germany and America (see chart). Building cards into the handsets of Japan’s mobile-phone users, who are ever eager to experiment with new tricks, seems a good way to get them to buy more on credit. DoCoMo would then benefit financially through its stake in SMCC.

Tags: Telecom

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