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Last Updated: Friday, 28 October 2005, 16:26 GMT 17:26 UK
Mobile wallets take off in Japan
Richard Taylor
By Richard Taylor
Editor, BBC Click Online

Japan is already setting the pace in terms of mobile technology. As Richard Taylor has been finding out in Tokyo, it is promising to make yet another leap into exciting new territory.

Japanese people shopping
The Japanese have long been early adopters of consumer electronics
Life in the largest urban area in the world is fast and often frenetic.

This is something that Tokyo's 27 million inhabitants have adapted to, but they are also quick to adopt ways to help oil the cogs of the daily routine and make life just that bit smoother.

For the past few years, pre-pay smart cards have been doing exactly that.

Today, most people here carry a wallet full of them when they leave home in the morning - whether its to make a small purchase, claim shop reward points or to get through turnstiles at train stations.

But useful as smart cards are, there is one essential appendage that no self-respecting Tokyoite leaves home without, the cherished mobile phone.

In a society where two out of three people own a mobile, and there is always one eye on the future, they have figured: why not take things one step further?

Yes, it is time to say sayonara to your wallet.

Convenience

The idea of a virtual wallet on your handset instead is coming of age and the education process is well under way.

We need to communicate the advantages to consumers
Usoke Oue, bitWallet
What it means is that you can ditch your smart cards, because they will all be stored on your phone instead.

Shopping for groceries, renting a video, buying a drink, or going to the theatre can all be done now with your mobile.

Edy is the name of the service leading the charge into this brave new world of mobile cash. It began life as a smart card but made the leap onto mobiles last year.

"We're promoting Edy in places where it's more convenient than using cash", said Usoke Oue, a spokesperson for bitWallet which makes Edy.

"We need to communicate the advantages to consumers, not just the convenience factor, but also the fact that you can earn reward points."

Reader-writer
Put your mobile against the reader-writer and the goods are yours
You can charge your Edy-enabled handset with up to 50,000 yen (around US$450 or 250).

It can be done in various ways. For example, place your phone against a reader at a charging station and it will take your cash and credit your mobile in return.

You can also load your mobile wallet by using the handset itself to go online and make a transfer directly from your credit card or even your bank.

With your mobile cash in hand you can begin your retail therapy in earnest.

To pay, you just put your mobile against the reader-writer and the goods are yours.

"When you wave the smart card or the phone in front of the reader-writer, a signal is transmitted from the reader-writer to the chip, and it actually interrogates the chip," explains Daniel Scuka from the online publication Wireless Watch Japan.

It finds out how much money is on there and debits the chip for the amount of the transaction.

"The money is transferred from the chip that's on the card of the phone into the merchant's system and more or less immediately into the merchant's bank account."

'Chicken and egg'

While Edy is not a major feature on the High Street yet, its presence is steadily growing. It is now accepted by around 25,000 retailers.

Gerhard Fasol, from the consultancy Euro Technology Japan, says: "Bringing bank transactions into mobile phones, to get that started is like a chicken and egg problem.

For daily life, for going out to have lunch, for having a beer after work with the boys it's really going to be the phone and that's all
Daniel Scuka, Wireless Watch Japan
"There are big investments necessary and also people have to change their habits. That will only happen if there is a benefit for all parties involved.

"So if only the carriers profit, or only the banks profit, or also if the banks make a loss and only the consumers profit, it will not happen. What has happened in Japan is main industry players here found a formula so that everybody has an advantage from it."

The biggest boost to the mobile wallet will come in January when Edy's rival Suica joins the party.

Suica has millions of commuters already using its smart cards to get through ticket barriers. Once these commuters find they can use a mobile instead it will raise awareness of the potential of the entire system.

"In the coming years people are going to start leaving home in the morning without cash," says Daniel Scuka. "They're going to have their phone, and that's it.

"Sure, if they're going to be making a big purchase that day they'll have some cash, they'll have their credit card.

"But for daily life, for going out to have lunch, for having a beer after work with the boys, it's really going to be the phone and that's all."

The technology is constantly being pushed in new ways. For instance, using your mobile in place of your house keys.

The reader on the front door can be connected to the net, so you can let someone in remotely or call in to lock up in case you dashed out in a hurry.

Doing so many things on a single device might seem like mobile madness to some people.

But in Japan they tend to take technology in their stride.

Putting the smart cards into mobiles may not prove this nation's biggest export, but in the home-grown market, at least, it seems destined to be a winner.


Click Online is broadcast on BBC News 24: Saturday at 2030, Sunday at 0430 and 1630, and on Monday at 0030. A short version is also shown on BBC Two: Saturday at 0645 and BBC One: Sunday at 0745 . Also BBC World.



SEE ALSO:
Tokyo smart cards challenge cash
17 May 02 |  Science/Nature
Mobile wallets start to take shape
01 Mar 05 |  Business
Japanese get first mobile wallets
10 Aug 04 |  Technology


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