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NTT DoCoMo to ease use of ‘wallet phones’

Japan's biggest cellular operator is making coinless payments with computer chip-embedded "wallet phones" as easy as using a credit card.
/ Source: The Associated Press

Japan's biggest mobile operator, NTT DoCoMo, is making coinless payments with computer chip-embedded "wallet phones" as easy as using a credit card.

The Tokyo-based mobile unit of Japan's top telecommunications company, Nippon Telegraph and Telephone Corp., is investing about $925 million to take a 34 percent stake in Sumitomo Mitsui Card Co., the credit card unit of a major Japanese bank, both sides said Wednesday.

Since the service began last year, Japanese using NTT DoCoMo's "wallet phones" have climbed to some 3 million people.

The wallet feature, which uses Sony Corp's FeliCa IC chip technology, is just the latest for this gadget-loving nation's fancy handsets, including digital cameras, portable TVs, e-mail and streaming video downloads.  All you need to do to make payments with a wallet phone is swipe the handset next to a special terminal set up at stores, which have climbed to 20,000 shops nationwide.

The catch so far is that the money must be prepaid.  People must first go to a special machine, where you put cash in the machine, which records the advance payments into the chip inside your phone.

Now, the ceiling for such payments stands at $470, but that's likely to grow with the credit card tie-up, according to NTT DoCoMo. Details — including security concerns, the card-brand name and when the service will begin — have yet to be decided, it said.

The wallet phone, which can now also be used at some soda-pop vending machines and restaurants, is part of DoCoMo's ambitions to turn cell phones into the gadget of choice for the future, replacing wallets, credit cards, tickets and keys.

NTT DoCoMo controls about 60 percent of the Japanese mobile market with 48 million customers. Sumitomo Mitsui Card is Japan's second-largest credit card company with 12.8 million customers.

Sumitomo Mitsui, which pioneered Visa card issuance in Japan, will install terminals at retail shops nationwide, which will probably greatly boost the places where wallet phones can be used. Sumitomo Mitsui Banking Corp., the banking unit in the same group, will also develop ATMs compatible with wallet phones, the companies said.