November 9, 2005. Copyright 2005, Graphic News. All rights reserved

Now you can even spend with your phone
By Mark Rutter

LONDON, November 9, Graphic News:  Not only will you be taking snapshots and listening to music on your mobile phone, but you could soon be using it to pay for your shopping and travel. Consumers in Japan, well known for being partial to the latest electronic gizmo, are already using a pre-paid charge card integrated into a handset.
 
Pre-paid smart cards have been popular with shoppers buying goods in Tokyo for a number of years. The cards are seen as convenient and particularly suitable for Japan, where many retailers are reluctant to accept credit cards as payment for low price items. One of the most popular is Edy, which is co-owned by several large corporations including Sony and Japanese telecom company NTT. Introduced in 2001, it is now accepted by around 25,000 retailers.
 
The Edy card can be topped up easily at vending machines, or loaded with credit directly from a bank account at charging stations situated around the city. To debit the card when paying for goods, it just needs to be placed near a reader. These smart cards are considered more secure than credit cards, which are seen as carrying a higher risk of theft and fraudulent use.
 
Suica was launched in November 2001 and is used by millions in Tokyo to pay for travel on the cityÕs trains by swiping readers at ticket barriers. Although similar systems are in use in many major cities, Japan has the highest use of these cards. Its use was extended to allow purchases from shops, hotels and other outlets operated by the train company. Like Edy, Suica relies on SonyÕs FeliCa technology.
 
A joint venture between the companies behind Edy and Suica saw the first trials of a mobile phone with an integrated debit card or Òmobile walletÓ in March 2005. It allows the owner of an enabled phone to use the card in a similar way to a stand-alone card to pay for goods and travel, in addition to checking their available credit on the handset.
 
As well as recharging at vending points, money can also be loaded by connecting the handset to an on-line bank account or credit card via the internet. Other Japanese mobile operators, keen to expand their market share, are working with credit card companies to develop their own systems. Further technological developments could see other functions added, such as electronic keys to door locks, storage of personal authentication information, and even the ability to store an electronic airline ticket.
 
Nonetheless, several factors could slow the spread of technology to the rest of the world. In Japan, there has been some reluctance to use smart cards outside of major cities, where people have traditionally relied on paying in cash. Progress has also been held up in some rural areas by a lack of high-speed wireless networks. A further factor that could hold back the technology in countries such as the UK and United States is the ingrained love affair with the credit card.
/ENDS