Mobile phones for cash, tickets, transactions, keys...
0. Mobile phone development stages:
- until 1999: voice
- from 1999: multimedia ("nice-to-have", "Vitamin-type")
- from 2004: wallet phone ("must-have", "Aspirin-type")
Today most people never leave home without their cellphone. Could the cellphone
contain everything we carry in our wallet: cash, credit cards, keys, access cards, drivers license,
photos, company ID, sport club membership cards,... ?
This FAQ (frequently asked question list) is about how our mobile phones could become a smart wallet.
Yes we believe it can, and it can be smarter:
for example applications can be linked and transactions
can be more secure.
A wallet can be integrated into a mobile phone by including a multi-application smart card.
Every application correspondes to a particular traditional function, for example one application can be
a particular credit card. These applications can be smarter and more secure
than the traditional cards, cash or keys they replace. Such a system is currently under large
scale testing in Japan.
You can read about wallet phones in more detail here: Wallet phone report
3. Can mobile phones replace cash?
Yes and No.
Today (2004) we do not know of large scale use of mobile phones for
cash-like payments. One reason is, that cash transactions must be possible off-line when
the mobile phone has no radio connection, thus requiring sufficient functionality within
the phone itself. Electronic money needs to be stored within the mobile phone.
Such a system is currently under testing in Japan by DoCoMo and will be introduced widely
in Japan during 2004. At the core of the payment system is a multi-function smartcard
which will be integrated into cellphones for new models starting from 2004.
You can read about this system here: Wallet phone report
4. Can a wallet phone be used off-line, i.e. when it is out of range of radio waves?
YES. Many functions can be used off-line. For example, JAVA applications in
the phone can check the electronic cash balance, show the transaction record, and
the phone can be used for payments. Adding to the ecash account via a credit card, performing electronic banking transactions,
or booking a theater ticket on the other hand need a network connection.
5. Could applications stored in my mobile phone one day replace all items in my wallet (cash, train tickets, subway tickets,
the tickets for next weeks rock concert, my company ID or student ID, my fitness club membership card,
the photos of my wife and kids etc)?
Yes. Such a system is under testing by 5000 users in Japan right now. At the core is a special
smart card built into the mobile phone. On this smart card many (on the order of 40) applications can
be stored: electronic cash, train tickets, identity cards, credit cards etc.
This number of applications may increase in the future.
Advanced mobile phones in Japan have external memory cards which allow storage of a large personal photoalbum, or
photos for professional needs, or other data.
You can read more about this system here: Wallet phone report
6. Can we purchase
soft drinks in Japan from a drinks machine with the mobile phone, while the drink is charged to the mobile phone bill?
No. C-mode machines let you purchase CoCa-Cola and other soft drinks in Japan by using your mobile phone.
However, the cost of the Coke is not charged to your phone bill. The cost of the coke is
charged to a prepaid C-mode Club account, which you must fill with cash before you cannot use it to purchase Cokes.
There are about 1000 C-mode Coke machines in Japan now, and you can find some around Shibuya or Shinjuku stations in Tokyo.
You can find out more about Cmode here: C-mode FAQ C-mode report
7. Does NTT-DoCoMo's have a concept to enable subscribers to use mobile phones for cash payments?
From 2004 onwards DoCoMo will build smart cards into mobile phones. Prepaid electronic
cash applications can be stored in these smart cards. Currently (March 2004) this
system is in a large scale test by about 5000 test users.
In DoCoMos system, the smart card can be accessed by JAVA i-appli, allowing the
user to read the e-cash balance directly with the mobile phone off-line, i.e.
the phone does not have to be connected to the radio network. So this type of electronic
money can be used even when the mobile phone is out of range of the radiowaves, e.g.
in the basement of buildings etc. Also integration into membership programmes and
loyalty programs is possible. More details are here: Wallet phone report
8. Is there a way to use a mobile phone in the same way as a credit card? Can credit card functionality be built into a mobile phone?
Yes. Both in Japan and also in many other countries there are systems where credit card data can be stored in a mobile phone and
can be communicated at a point of sale to make a purchase or other transaction. One way to do this, is to store the credit card
data inside the mobile phone. Nokia has introduced such a system in several locations of the world on a test basis. In this system
only an identification number is stored in the mobile phone, but no other funcationality. In Japan JAVA applications (i-appli) are
used for credit card transactions. The JAVA application communicates with a point-of-sales equipment via the infrared link. In the future,
credit card functionality can also be loaded into multi-application smartcards built into mobile phones. Such a system is under test in Japan.
9. How are on-screen coupons and 2D bar codes (QR codes) used for payment with mobile phones?
QR codes (2D bar codes) have become a standard in Japan for interfacing mobile phones, and
are used in a variety of different payment systems. 2D bar codes are used in Japan for example
to pay the mobile phone bill at a convenience store. The billing information is encoded
in a 2D bar code which is downloaded via i-mode from DoCoMos billing center to your mobile phone.
The 2D bar code containing the billing information is read by a sensor at the cash register of a
store, where payment can be made in cash. Completion of the transaction is communicated back
to the billing center through the online connection of the cash register.
