IC Mobile Payment Reaches Mainstream
IC Mobile Payment Reaches Mainstream

IC Mobile Payment Reaches Mainstream

IC Mobile Payment Reaches Mainstream

WWJ Portable Reportable .mp3 audio Report Here

Of the 10 mn Japanese using some form of the FeliCa contactless IC payment system as of 1 April, 700,000 are already mobile-enabled, according to Tokyo’s bitWallet, the joint-venture set up to commercialize Sony’s FeliCa technology. In today’s WWJ Portable Reportable, we speak with Norihiko Fujita, a bitWallet manager working on extending the FeliCa-based “Edy” payment service into mobile platforms. After NTT DoCoMo launched their own-branded “i-mode FeliCa” service last summer, Vodafone and KDDI are playing catch-up in 2005, and they’d better hurry: with 20,000 merchants already accepting FeliCa-based payments, there’s money to be made from mainstream users. (“Edy” stands, somewhat hopefully, for “Euro, Dollar, Yen”).

Keep in mind that the business model for anything related to mobile ewallets is still a bit fuzzy.

DoCoMo launched “i-mode FeliCa” last year and still does not take a percentage of transactions, according to what the company has told us recently, indicating that Big D hopes to profit from overall increased mobile usage, terminal sales and collateral marketing rather than from a direct payment percentage.

The service was launched in 2004 on 2G models, and it was only last month that DoCoMo announced a full line-up of FeliCa-enabled 3G cellys for release this summer (Sharp’s 901iS was first out the door last Friday when it hit the streets in Tokyo).

But Vodafone and KDDI must be feeling the competitive heat; both have announced versions of FeliCa for their handsets for launch within 2005 based on bitWallet’s Edy emoney. The services will work via a downloadable Java applet (a BREW applet, presumably, for KDDI).

And while Fujita-san doesn’t mention it in Today’s Portable Reportable interview, I suspect that Vodafone and KDDI will be more interested in making a buck out of each transaction, although we’ll have to wait until their services launch to determine the details.

bitWallet will act as the payment processor and clearance agent, see WWJ video interview here, charging a fee to merchants to accept the transaction just like, say, Visa or JCB charges a merchant to accept a credit-card payment.

Fujita-san also mentions the possibility of extending FeliCa-based Edy functionality right onto foreign-made terminals (Nokia? Motorola? Samsung?). While no plans are yet public, it could be a real coup to see a made-in-Japan payment model and technology available in other markets.

— Daniel Scuka