On the Digital Money blog, Dave Birch digs into the impact that contactless mobile payments are having on the levels of cash in circulation in Japan. "The Feds say that the Bank of Japan reported that the total amount of cash in circulation has started to fall for the first time on record."

In a post titled "Pincer Movement" on the Digital Money Blog, Dave Birch writes about the recent story we posted here on Payments News earlier this week about NTT DoCoMo and McDonald's getting together for contactless mobile payments in Japan.

Dave asks "isn't this a nightmare come true for the payments guys in banks? The retailers and the mobile phone operators getting together to provide a new solution to a problem that is not central to either of them but as a byproduct of achieving some other goals -- perhaps customer intimacy or reduced churn -- and chips away at legacy payment systems provided by banks..."

Reuters reports that NTT DoCoMo and McDonald's have announced they will be forming a new joint venture company to facilitate acceptance of mobile payments at McDonald's locations in Japan.

Nathan Parmelee writes for the Motley Fool about NTT DoCoMo's latest financial results - commenting about "the company's osaifu-keitai (portable wallet) functionality, which allows a mobile phone to function as a cash card (stored money), credit card, train pass, plane ticket, or other item. Starting from next to nothing a year ago, 20 million subscribers now have phones with this functionality, and 1.5 million have applied for and activated the credit card functionality."

Martyn Williams provides an update for InfoWorld on NTT DoCoMo's DCMX payment service in Japan - reporting that it has enrolled over 860,000 people to the service. "The system relies on a non-contact smart card platform developed by Sony Corp. called Felica. Payment is made by placing the phone close to a reader/writer terminal in participating stores. There are already around 60,000 such terminals in place and NTT DoCoMo expects this to more than double by April 2007."

"The Mobile Phone as the Key to Daily Life" - that's the theme of this year's NTT DoCoMo's Annual Report to Shareholders. DoCoMo says that it is developing new businesses such as credit services based on the strength of its customer base of over 50 million subscribers and that it "intends to hasten this evolution by providing diverse, innovative services that enhance the convenience of customers' daily lives, including not only voice calls and Internet connection services via i-mode, but also credit payments, e-money, e-ticketing, music players and television, and even ID cards and house keys."   » Continue Reading

In an in-depth article, Alex Ritman writes for ITP Technology about NTT DoCoMo's experiences with mobile payments in Japan - and looks at mobile payments initiatives in Kuwait by MTC-Vodafone and the National Bank of Kuwait - where the bank says that 30-40% of its customers have signed up for the service. In the article, Ritman quotes Ghassan Hasbani, principal of Booz Allen Hamilton's communications and technology practice, who says that “M-payments by itself is not a major source of revenue generation - m-payments make up just around 2% of NTT DoCoMo's overall revenue. However, when you introduce mobile payments, it could reduce churn by up to 15%. This is what was experienced by NTT DoCoMo.” [Note: Read more about mobile payments in the Payments News Mobile Commerce Archive.]

Reuters reports that KDDI, Japan's second-largest mobile phone operator, is planning to cooperate with credit card issuer JCB to offer mobile phones that can be used as credit cards - apparently aiming to counter a service by NTT DoCoMo.

David Haskin writes for TechWeb about six mobile innovations that he says "will change your life" - including "Pay By Phone". He points, in particular, to the progress being made with mobile payments in Japan by NTT DoCoMo.

The ROA Group has published a for-fee report entitled, "The Future of Mobile Commerce in Japan". The 93-page report focuses on trends, players and consumer behavior in the mobile market of Japan.

Chris Hogg reports for the BBC from Tokyo about NTT DoCoMo's move into mobile payments and credit.   » Continue Reading

Yukako Ono writes for Japan's Asahi.com about NTT DoCoMo's new DCMX contactless mobile payment service phones containing Sony Corp.'s Felica contactless IC chip.   » Continue Reading

Martyn Williams writes for Digital World Tokyo about yesterday's announcement by NTT DoCoMo of its new DCMX mobile credit card / mobile payments service.   » Continue Reading

NTT DoCoMo and its eight regional subsidiaries announced today that they will launch later this month DCMX consumer credit services via iD, DoCoMo's brand and platform for mobile credit cards. Users of Osaifu-Keitai phones with wallet functions will be able to choose from two plans to make highly secure purchases from small to large amounts using their phones as DoCoMo-issued credit cards. Note that the new service also includes issuance of a Visa or MasterCard card that is tied to the same account as the phone so that consumers can make purchases even at locations that don't yet support mobile payment payment.   » Continue Reading

NTT DoCoMo and LAWSON, Inc. have announced a business alliance that will result in customers using DoCoMo's Osaifu-Keitai phones with wallet functions for a variety of mobile services at LAWSON convenience stores in Japan.   » Continue Reading

Martyn Williams reports for InfoWorld that Aeon Co., one of Japan's biggest retail groups, is "throwing its weight behind NTT DoCoMo's plans to enable touch-and-go credit card payments through cell phone handsets."   » Continue Reading

NTT DoCoMo, UC Card Co., and Mizuho Bank have announced a comprehensive agreement which includes joint promotion of DoCoMo's iD brand card business. Under the agreement, Mizuho Bank will transfer its stake in UC Card (approximately 18% of UC Card's outstanding shares) to DoCoMo for about 1 billion yen in the middle of March 2006. In addition, UC Card will work to expand acceptance of the iD brand at its network of participating stores throughout Japan.   » Continue Reading

Reuters is reporting from Japan that "NTT DoCoMo, Japan's largest mobile phone operator, will tie up with Mizuho Bank and Credit Saison to start a service allowing mobile phones to be used as credit cards," according to a story in the Nihon Keizai Shimbun on Saturday. The deal, which could be announced as early as next week, would involve DoCoMo investing to acquire an 18 percent stake in UC Card Co, a Mizuho affiliate.

Market Platform Dynamics has announced a new paper exploring the evolution of mobile payments in Japan and Asia by Andrei Hagiu, an Assistant Professor at Harvard Business School, titled "i-modes and Octopi: Will Asia Reshape the World's Payment Industry?"   » Continue Reading

Anthony Faiola reports for the Washington Post on growth in the use of e-cash payments in Japan following widespread deployment of e-cash equipped cell phones by NTT DoCoMo.   » Continue Reading

Anthony Faiola reports for the Washington Post on electronic payments in Japan.   » Continue Reading

Martyn Williams reports for InfoWorld.nl on plans by Japan's NTT DoCoMo to launch a service in December enabling customers to make credit card purchases using the contactless chip technology embedded in its latest cell phone handsets.   » Continue Reading

John Boyd writes for the IEEE Spectrum Online about NTT DoCoMo's mobile payments activities in Japan.

The critical element in DoCoMo's Osaifu-Keitai, or mobile wallet, is a wireless smart card chip, FeliCa (from the English word "felicity"), which was developed by Sony Corp. and Royal Philips Electronics for close proximity, low-data-rate transactions. The wallet phones can be used to make electronic purchases at stores or vending machines equipped with FeliCa readers; can act as boarding passes on certain domestic air flights; and can authorize entry through corporate security doors—all with a wave of the handset.

Reuters reports on a new alliance formed by Japan's credit card companies to promote a standard to allow use of mobile phones in lieu of credit cards.

he new organisation denied that its move was a reaction to NTT DoCoMo and Sumitomo Mitsui Card Co. Ltd.'s partnership and said it was open to everyone, but both the No. 1 operator and the No. 2 credit card firm were absent from the membership list.

The mobile transaction alliance has 39 member companies so far including Mastercard International Japan Inc., UFJ Nikos and Toyota Motor Corp. It expects to sign on 10 more companies including Fujitsu Ltd.

Ginny Parker Woods reports for Tuesday's edition of the Wall St. Journal on NTT DoCoMo's mobile payments initiatives and its latest plan to evolve into "something like a bank" by embedding a DoCoMo credit card in its mobile phones.

So far, DoCoMo has sold some five million FeliCa wallet phones, but it's too soon to say whether the idea will take off since many users aren't taking advantage of the new features. Mr. Natsuno says that once people are hooked on the convenience of making small payments with the electronic cash stored in their phones, they'll naturally want to make bigger purchases using credit.

Card Technology reports on NTT DoCoMo's efforts with East Japan Railway to develop a common contactless infrastructure for payments.

Separately, NTT DoCoMo is exploring ways to expand the retailer infrastructure capable of accepting the contactless e-cash loaded on to its mobile phones.

We're currently doing some extensive research on the mobile commerce / mobile payments market. I'm currently seeking a senior contact at NTT DoCoMo or Sony who has been involved in DoCoMo's integration of the Sony FeliCa technology with DoCoMo i-mode services.

If you are that person - or can introduce me to that person - please contact me as soon as possible via our feedback page.

Business Week reports on NTT DoCoMo's plans to enable cell handsets to be used as credit cards.

After introducing handsets last year that double as debit cards -- allowing users to pay for small purchases such as soda or coffee from vending machines and convenience stores -- the company this year plans to make those phones full-fledged credit cards.

Dan Balaban reports for The Deal on NTT DoCoMo's contactless mobile wallet "i-mode FeliCa".

To date DoCoMo has lined up 20 service providers and counting for i-mode FeliCa, including e-ticketing schemes for the country's large Toho Cinemas chain and its two major passenger air carriers, Japan Airlines and All Nippon Airways. JAL customers, for example, can wave their way onto the jet without needing a boarding pass.

"We see this [handset] as a fundamental device the people will have in the future," says Izuru Takaya, JAL's planning manager for product marketing and development.

EE Times reports that NTT Docomo has announced a new phone-based credit card service.

NTT Docomo will collaborate with Sumitomo Mitsui Financial Group Inc. (SMFG), Sumitomo Mitsui Card Co. Ltd. and Sumitomo Mitsui Banking Corp. (SMBC) to establish a platform for a credit-payment service using Docomo's phones equipped with the Felica wireless IC chip for cashless payments.

Under the deal, Docomo will shortly launch a new credit card brand and acquire 34 percent of the equity of Mitsui Card, paying approximately 98 billion yen (about $925 million). Docomo expects that Sumitomo's card network will accelerate deployment of its new credit card network.

Barrons this weekend has a story about the turnaround at NTT DoCoMo (subscription reqd). Of particular note are the comments about DoCoMo's addition of FeliCa chip technology from Sony to several new DoCoMo phones. The article goes on to report on speculation by Merrill Lynch analyst Yasumasa Goda who thinks that DoCoMo may enter the consumer finance business directly by buying a credit-card company.

Explains Rob Marano, a telecom consultant at PricewaterhouseCoopers: "Telcos have better relationships with customers than banks do. This is an established high-frequency, high-transaction relationship."

The Taipei Times carries an AP story from Tokyo on NTT DoCoMo's wireless network and new cellphones capable of carrying electronic cash.

To pay you simply wave your cellphone within a few centimeters of a special display found in stores, restaurants and vending machines around Japan. A fairy-like tinkling sound means your purchase is being deducted from the embedded chip using radio-frequency ID technology. It's instantaneous.

Speaking of mobile commerce, the Financial Times reports on NTT DoCoMo's launch of a handset-based electronic wallet service. The mobile operator believes the addition of the new wallet capability will reduce the risk of subscriber's churning as number portability comes soon to Japan.

DoCoMo has signed on departments stores, a convenience store franchise, 20 McDonald's restaurants, airline ANA, credit card company JCB, and JR, the public railway operator, among others. JR users would, for example, be able to use their mobile handsets as travel passes.

Using FeliCa technology from Sony, NTT DoCoMo is launching a trial of a couple thousand handsets equipped for making mobile payments.

Network 365 announced this morning that it has been selected by Japan's NTT DoCoMo to provide DoCommerce, a secure mobile payments service.

PMN reports on a new mobile payments trial in Japan involving NTT DoCoMo, Visa, Nippon Shinpan, OMC Card and AEON Credit.

The service uses an i-Appli Java application and the IR port of DoCoMo's 504i series handsets. Users enter their credit card details into the i-Appli application and can then use the handset to transmit payment via IR to specially-equipped retail terminals. The trial will involve about 3000 users, selected by Nippon Shinpan from its existing Visa customers, and 500 retailers in the Tokyo area. Visa is supplying technical expertise and implementation of its 'Visa Proximity Payments Messaging Specification'.

CW360 reports that the Edy electronic money system created by BitWallet, a 25-member consortium headed by Sony and NTT DoCoMo, is to be adopted by seven of Japan's major banks and credit card companies for use with their credit cards.

The Edy system, which is based on Sony's Felica contactless integrated circuit card, does not require the card to be inserted into a special reader. The system can be activated for money debits when the card is placed within 10 centimetres of an Edy sensor. As money is stored on the card beforehand, the payment process takes 0.2 seconds to complete. The in-store terminal communicates with the Edy data centre once or twice a day to reconcile transactions and to check for fraud.

Today, around 200,000 Edy cards have been issued. At least one quarter of these double as corporate ID cards for Sony, Bank of Tokyo Mitsubishi and Sanden workers while around half have been bundled with Sony's Vaio W desktop personal computer. Transaction volumes are small. Each of the 100 stores currently online handles an average of around 1,000 Edy transactions per month but Yamada is confident the system will see around a 100-fold increase in transaction volume once AM/PM begins accepting the cards.