Abstract
Mobile payment started in Japan in 1999 with the introduction of i-Mode. Started in 1999, mobile payment systems in Japan have evolved over several years, and today form a considerable component of Japans economy. Mobile payments in Japan have been developed far beyond the trial or conceptual stage today. A substantial proportion of rail tickets, air tickets, shares and investment and many mail order goods such as books, music, DVDs, fashion and clothing are bought and paid for by or via mobile phones in Japan. In many cases, for example purchasing Express Train Tickets for the Tokyo-Osaka Shinkansen, the mobile phone is by far the most convenient way to purchase a ticket.
Most people take their personal mobile phone along everywhere they go, and there are many advantages to use the mobile phone for paying services, transportation, and for shopping. In Japan, mobile payments already amount for a substantial part of all payments, and therefore have large and increasing economic impact.
The industry trend to flat-rate data and flat-rate voice forces mobile operators to look for new business models to continue improving and developing mobile services.
The present report gives a comprehensive overview of the variety of mobile payment services in operation in Japan, explains in detail how several proven mobile payment systems work, and explains the trends for mobile payments. Although this report is focused on Japan, mobile internet innovations from Japan tend to become global standard recently. Therefore we expect, that this report also gives a good window into the future of mobile payment systems in Europe and the Americas.
Our reports are primarily written for and purchased by senior executives in major blue-chip corporations who need to be thoroughly informed about business and technology trends emanating from Japan. Major global telecom carriers and equipment manufacturers from US, EU and Japan, investment bankers, equipment manufacturers, service providers, Embassies and Government agencies, University students and professors and many professionals from all over the world purchase our reports. The Government of Finland has engaged us to advise on the research funding strategy for mobile services, and the Harvard Business School (HBS) is using one of our reports for research and teaching.
Eurotechnology Japan KK cooperated in organizing and co-sponsored the Members meeting of the global Mobile Payment Forum, and Eurotechnology-Japans CEO gave a two hour keynote presentation to industry leaders at the Mobile Payment forum in Tokyo recently.
Table of Contents
- Executive Summary: Mobile Payment - New Business Models for Mobile Communications
- Mobile payments as aew business models for mobile communications Japan has become the worlds
most competitive communications market
- Why are new business models needed for mobile communications?
- Japans telecommunications landscape (graphical map, including recent restructuring, mergers and de-mergers and expected new entrants)
- DoCoMo and KDDI/AU are the leaders, under competitive pressure by Vodafone and new entrants
- DoCoMo, KDDI and Vodafone - the top players in Japans mobile industry (graphics comparing financial data - sales, net profits and market capitalization - for DoCoMo, KDDI and Vodafone)
- Competing for Japans mobile subscribers (graphics: subscriber data for all Japanese mobile phone operators 1998-2004, including industry consolidation)
- Competing for Japans mobile subscribers (graphics showing month-by-month subscriber growth/loss for the period Jan 2003 - March 2005)
- DoCoMos invstment in credit card companies: building new business models
- DoCoMos investment in credit card companies
- Credit card payments are a much bigger market than mobile communications (graphic comparing Japans mobile communications market with Japans credit card payment market since 1990 with projection to 2010)
- Japans credit card payment and cash advance market (pie chart showing market shares of credit card companies)
- DoCoMos investment in credit card companies: implications
- Japans mobile internet as a platform for mobile payments
- Mobile payments today in Japan
- The i-Mode Exosystem
- Mobile internet penetrates Japan (graphics showing mobile internet subscriber numbers for 1999-2005)
- Todays 3G i-Mode in a nutshell: users pay for content
- M-commerce, mobile payments and mobile transactions
- Japans mobile internet supports a range of m-commerce and m-transactions
- m-commerce, m-content, and m-advertising in Japan (market size estimatiomnns, graphics for 2000-2006)
- Mobile mail order, e-commerce and m-commerce (market size estimations: 1998-2010)
- Payment for mobile content: mobile music
- Overview of mobile music market
- Graphical view of mobile business cash flow strams and business relationships
- Music on i-mode
- User experience to purchase music from i-Mode SH900i handset
- Mobile music sales vs fixed line internet music sales (graphics: online music market segmntations for 2001-2004)
- Market size for ringtones in Japan
- Mobile music market size in Japan (graphics 1999-2004, with extrapolation to 2007)
- Mobile music as a share of total music market (graphics showing data for 1994-2003)
- Leading mobile music sites, profiles and descriptions
- Selling full songs by mobile phone: KDDI/AUs Chaku-Uta-Full service
- Mobile music: the new business model for music, in comparison with the old CDROM model (graphical market size data for 2004-2005 comparing chaku-uta, chaku-uta-full and and Apple i-Tunes for 2003-2005)
- KDDI/AUs chaku uta full, screen images and characteristics, menu list
- Chaku-uta full: screen images and characterization of submenus
- KDDI/AUs top 3 chaku uta full sites: screen images
- Screen images of chaku uta full songs stored in a KDDI/AU phone
- Paying for mobile games
- Overview
- Graphical view of market size for arcacde games, video game softwaare, video game hardware, fixed line games and mobile phone games
- Example: leading mobille phone game game make and DoCoMo i-Mode partner
- DoCoMos payment intermediation system for console games
- Online purchasing, mobile shopping malls
- Online purchases by mobile phone
- Commerce features unique to mobile phones
- M-commerce: shopping by mobile phone
- Examples of mobile phone online bookstores
- Examples of mobile phone online music stores
- Mobile shopping mall
- Event tickets by mobile phone, example of leading mobile store
- Selling flowers by mobil phone
- KDDI/AUs mcommerce initiatives
- Overview
- AU shopping and auction menu
- AU shopping
- Au auctions via mobile phone
- AU records and EZ music store
- AU style
- Reserving and paying with mobile phone for train travel: example - ExpressCard
- Overview of the ExpressCard
- Table of key data, market size, usage characteristics, and sales volume estimation
- ExpressCard mobile selling system description
- Seat reservation and purchase via PC internet site
- Seat reservation and purchase via mobile phone, screen image of top menu
- Mobile reservation, and purchase site, login screen image and description
- Researvation and purchase sequence, screen images
- Paper ticket issue of tickets purchased by mobile phone
- Estimation of market size
- Reserving and paying with mobile phone for train travel: example - Odakyu romance car club
- Overview of the Odakyu romance car club
- Mobile reservation, and purchase site, login screen image and description
- Researvation and purchase sequence, screen images
- Summary
- DoCoMo coin
- Overview of DoCoMo coin system
- What are wallet phones and why
- Overview
- Example: P506iC (introduced on July 10, 2004)
- i-Mode Felica transaction partners
- Why wallet phones, what are wallet phones
- DoCoMo i-Mode Felica wallet phone description
- Schematic overview of the i-Mode Felica System
- Why wallet phone
- Trends of mobile communications, phases of development
- Mobile phone - stages of development
- Implications for the mobile carrier
- The Felica platform
- Overview
- Inside view of FeliCa cards
- FeliCa and standards
- Felica, data for specific FeliCa card models
- Felica compared with other IC-Cards
- VISA, SONY and Infineon alliance
- ANA mileage club card as an example application
- Contactless secure card reader/writer
- Security and privacy
- Security is critical for success
- Security - key issues
- Security - solutions
- Privacy
- Felica Networks - the company
- Overview
- JR-East joins Felica Networks, graphics showing capitalization for pre and post investment
- i-Mode Felica preview service (January - June 2004)
- Overview
- Concept
- Terminals for the preview service
- Preview service description
- Participating companies
- Applications tested
- List of services
- i-Mode Felica services from introduction (from July 10, 2004)
- Overview of wallet phone introduction on July 10, 2004
- Initial eleven wallet phone services (from July 10, 2004)
- Listing with description of partners
- Twenty three wallet phone services (from August 2004 and beyond)
- Listing with description of eleven initial introduction partners
- EDY Electronic Cash
- What does the name Edy mean?
- ANA mileage club as example for EDY application
- Demonstration of EDY electronic cash functionality with screen images
- Why electronic cash?
- Requirements for electronic cash
- Edy overview
- Edy timeline and history
- Japans ecash is private business
- National introduction of ecash
- Edy charger unit for retail use
- Cash register (POS) with Edy reader/writer
- Softdrink machine with Edy reader/writer
- BitWallet KK
- Company outline
- Shareholders and equity ratios
- i-Mode FeliCa examples
- Karaoke
- Contactless off-line payments
- Photocopy machines
- Office applications
- Game arcades
- Event tickets
- POS payments
- Airline tickets, reservations and check-in
- Phones as train tickets
- The competitive picture: competing mobile operators
- Outline
- The challenge
- Summary: Mobile payment
