Phones Become All-Purpose Payment Devices
Gartner Research has issued a report detailing the possibilities of using mobile phones as all-purpose payment devices.
Newly announced services and handsets from Japan’s NTT DoCoMo make mobile payments possible in both prepaid and postpaid modes. According to Gartner, operators should concentrate on the merchant infrastructure to exploit the possibilities.
On 16 June 2004, Japan’s mobile phone operator, NTT DoCoMo, announced i-mode FeliCa, a service for new handsets to act as electronic wallets. The new handsets will be available in July 2004 with Sony’s contactless smartcard chips embedded in them.
DoCoMo introduced a virtual shopping mall for mobile customers in 2003. It enabled customers to purchase goods and pay by debit or credit card or by charging the transaction to their phone bills.Now, an i-mode FeliCa user will be able to wave the handsets over a sensor to pay transit fares, buy goods or confirm his or her personal identity to gain access to a location. i-mode FeliCa willallow users to buy from the 9,000 outlets participating in Sony’s Edy e-money system. DoCoMo’s system brings together the worlds of prepaid and postpaid transactions.
Users can customize the services they choose to carry in a mobile wallet by signing up with service providers including All Nippon Airways, East Japan Railway Company and McDonald’s. Forty service companies will supply software (in downloadable Java applets) that will make their services usable by the mobile wallets.
Gartner says that a contactless credit facility is the most interesting part of the offering. How many retailers’ point-of-sale terminals will be able to process contactless credit payments is unclear. Acceptance at the point of sale will be critical to the success of contactless payment schemes. If few retailers accept contactless payments, customers will tire of trying to use them and revert to traditional payment methods.
Gartner has prepared two reports that detail their findings and recommendations:
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