By Shin’ichi Konomi of RFID in Japan
A month has passed since Japanese wireless carrier NTT DoCoMo launched a service allowing consumers to use their phones as a mobile wallet. Early adopters are making the devices’ characteristic “jingling” at the checkout counters of convenience stores across Japan. While the service seems destined to introduce a new level of convenience to consumers’ shopping experiences, some privacy and security issues remain unresolved.
The “I-mode FeliCa Service” launched when NTT DoCoMo introduced their “wallet phones” (a handset with an embedded transponder) to the market on July 10, 2004. As of August 14, handsets from Panasonic (P506iC), Sharp (SH506iC), Sony Ericsson (SO506iC) and Fujitsu (F900iC) are available for use with the system. FeliCa, Sony’s proprietary contactless smart card technology, is widely used in projects throughout the Pac Rim including Edy, the popular prepaid shopping cards as well as Suica and Icoca train passes.
Eleven companies now provide wallet-phone services with an additional twenty-eight launching in the near future. But because of a limited number of deployed systems, end-users today may spend more time looking for terminals than the time saved by wireless payment. Lhuga, an early wallet phone user, could not find a FeliCa enabled ticket machine at a movie theatre: “There was a ticket machine right next to the elevator. But it seemed that I couldn’t use it there.” DoCoMo is aware of this issue and recently announced that they would provide financial support for companies to purchase and promote the terminals.
Companies using the I-mode FeliCa Service seem eager to entertain consumers in hopes of driving usage at their locations. For example, convenience chain AM/PM offers “Club AP,” giving consumers the chance to play a scratch game on mobile phones for every 500 Yen spent at the store. The prize—free ring tones. Another game lets users care for virtual pets “living” in their phones.
Akio Murata, an avid wallet phone user and a blogger, purchased a bottle of Italian Cappuccino at an AM/PM store the other day. “I picked out [a bottle of] Italian Cappuccino, walked to the checkout counter, and put my mobile phone [on a reader device]. Then, there was that jingling sound and I also got a 50-yen discount. Well, it was kind of fun.”
Unfortunately the wallet phones’ activation process is not as entertaining. Mr. Murata writes: “[Setting up the phone] is difficult because of the relatively large number of steps to go through. Specifically, the registration process for Edy requires typing in detailed information.”
If a phone is lost, users call DoCoMo to terminate the service. But their unique cards won’t be returned, much like a lost wallet today.
Like other RFID technologies, there are a number of unresolved privacy and security concerns. The unique ID stored in a wallet phone cannot be changed without discarding the phone. Further, the ID’s use in a number of related services leaves users vulnerable to profiling or tracking.
The number of users is expected to increase next year when other mobile carriers and Japan Railways implement the system. It seems that wallet phone technology–at least in Japan–is making the early strides towards widespread consumer acceptance.