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Monday, October 31, 2005

Mobile wallets take off in Japan

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.


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

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."

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."



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