Phones Become All-Purpose Payment Devices

June 28, 2004 By Digital Trends Staff

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:

“Market Focus: Contactless Chip Cards, Worldwide, 2003-2008″

Showing 3 comments

Mayank and Saurabh at 11:33pm 19th January 2009 I request you to provide the examples of where these type of payment system is working and how much user are taking benefit from it.this will help to look out the popularity of system and how much it is secure.
Tim Stevens at 10:47pm 26th June 2006 ya, i'd be worried about security as well. how easy/hard is it for someone to get your credits illegally? Especially with how rampant identity theft is now. I definitely will never get those small little keychain credit cards that you just hold up to a scanner. no checking of id or anything. they make it to be convenient, but i think the end result is that it puts us at a greater risk of getting ripped off by someone stealing our identity or even keys!

This stuff has to be proven first.
terry yeong at 8:59am 24th June 2006 I see many article talking about the feature of the mobile money or mobile payment. But i never see an article talking about, what is the risk of using mobile money or payment. i hope i can see or read some this type of article, so i can help me to improve the knowledge on this area.