NFC Technology Replacing Native Japanese Contactless Payments?

by Mercator Advisory Group 0

According to this news story, NTT DoCoMo, the leading in mobile data and payments in Japan, is following its KDDI competition and looking to replace its Sony FeliCa mobile contactless chip technology with the NFC approach. This is both great news for the NFC camp and a potential breakout strategy for both South Korean and in particular Japanese mobile phone manufacturers. Japanese mobile phones have suffered from “Galapagos Syndrome.” Their handsets sell very well in the local market (and, yes, Japan is an island) but don’t thrive in new geographies. With NFC capability built in, they will have a reasonably compelling hardware feature that appears headed toward success in Europe and North America.

NTT DoCoMo is set to make the switch to NFC standard technology in 2013, according to a report in Japanese business newspaper Nihon Keizai Shimbun.

The mobile network operator currently runs the Osaifu-Keitai mobile wallet service, a mobile payments, ticketing and rewards service based on non-NFC standard Sony FeliCa mobile contactless technology.

In July, rival operators KDDI and Softbank Mobile signed a deal with Korean mobile network operator SK Telecom that will see the three companies working together to switch from existing non-NFC standard mobile contactless services to an NFC standard approach. KDDI is conducting extensive NFC tests with partners including Toyota, All Nippon Airways (ANA), Japan Airlines (JAL), Toho Cinemas and card issuers Orient Corporation, Credit Saison, and Aiwai Card Services.

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