The Hindu : International : The cellphone as wallet

Online edition of India's National Newspaper
Friday, Jul 23, 2004

International

International

The cellphone as wallet

TOKYO, JULY 22. As it is, you don't leave home without it. In a world of cashless payments, why not simply make your cellphone a wallet?

Japan has long been phasing out the hassle of coins and bills with microchip-laden ``smart cards,'' that let people make electronic payments for everything from lunch to the daily commute. But even smart cards could be on their way out, their plastic presence overtaken by virtual-wallet technology now available in the everyday cellphone.

Other nations, led by South Korea, already have so-called mobile commerce payment schemes in place that let people punch keys on their cellphones so that the devices trigger transactions. But a series of phones going on sale this summer in Japan, for use on NTT DoCoMo's wireless network, are the world's first with an embedded computer chip that you can fill up with electronic cash.

First you find a machine that is used to stock smart cards with cash. They can be found in some convenience stores and offices in Japan. You place the phone in a special spot the machine and slip bills into it. The phones have a 50,000-yen (about Rs. 20,250) limit. Now you can spend.

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

Unlike infrared or other mobile payment schemes that require clicks on the handset, you do not even need to open your clamshell-shaped phone, the style of choice here.

Paying is fun

It is rather fun to pay for things this way. It is also an idea that makes sense, given that almost every Japanese has a cellphone and relies on it for so much information that being stranded in the street without one almost causes panic. There are 81.5 million cellphones in this nation of 127 million people.

For the wallet phone tech really to take off, stores, theatres and restaurants that accept electronic payment need to become more widespread. They total around 9,000 in Japan so far, but the number is growing. To buy a Pepsi from a vending machine, you push a button on the machine that indicates electronic payment and push another button to pick the soda. When a display the size of a small greeting card lights up with the price, you put the phone next to the display.

Shazaam. The soda pop rolls out, and the display blinks with the amount of money left in the phone.

Millions of Japanese have smart cards. One, the Suica, works as a commuter train pass. The other, an Edy card, works as a wallet at some stores and its ``cash'' machines are the ones NTT DoCoMo uses for its phones.

Beware of pickpockets

Computer experts have suggested that hackers could develop a way to pickpocket cell phone wallets merely by getting close to people's handsets. Of course, that has not happened yet.

Another concern is that a telecom company — or a government — could find out too much about your spending proclivities and your physical movements.

But other features on Japan's richly endowed cellphones offer marketers plenty of information on consuming habits as it is: Almost all phones have e-mail and Internet connections for restaurant searches, ring tone downloads, news and weather. The P506iC, like most new mobile phone models, has a digital camera and colour display. It takes 15-second video clips and has a memory-card slot.

One Japanese airline lets passengers use the phone to speed up check-ins at airports and next year you will be able to use the phones to begin paying for train rides and video rentals.

Later this year, Japanese credit-card company JCB Corp. plans to offer a service that will let corporate clients use chip-embedded phones as electronic keys to get into office buildings.

And if you lose your digital wallet phone? Well, DoCoMo can lock it. Which means no one else can use it for calls. And no one else would be able to add more money to the cash-dispensing chip.

But whatever money is stored on the phone is like a virtual wad of cash. The clerk at the DoCoMo store repeatedly advises not to put any more money into the phone than he or she could afford to lose.

Printer friendly page
Send this article to Friends by E-Mail

International