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disruption Finance Galapagos effect Leadership mobile payment

Apple Pay vs Japan’s Osaifu-keitai – the precursor to Apple Pay

What can we learn from 10+ years of mobile payments in Japan?

Apple Pay vs Japan’s Osaifu-Keitai: watch the interview on CNBC

https://www.cnbc.com/video/2014/09/16/why-apple-pay-isnt-as-revolutionary-as-it-seems.html?play=1

Mobile payments Japan, e-money and mobile credit (200 pages, pdf file)

Japan’s Osaifu keitai mobile payments started on July 10, 2004, after public testing during December 2003 – June 2004

Two different types of Docomo‘s “Osaifu-Keitai“, manufactured by Panasonic and by SONY, were publicly tested by 5000 customers between December 2003 – June 2004. Docomo’s Oseifu keitai mobile payment system builds on SUICA NFC stored fare cards, which JR-East brought to market in Tokyo on November 18, 2001, after long years of development and public testing, where the author of this newsletter was one of the testers.

Apple-Pay was developed building on almost 15 years of NFC payments in high volumes in Japan

Therefore, those who wish to make predictions about how the Apple-Pay market is likely to develop can use the experience gained during 15 years in Japan.

There are also some open questions, which will probably be answered after we can all check out Apple-Pay after September 19, 2014. One point which is very important is the speed of transactions – especially in transport applications such as the London or Tokyo Subways – read about this in the next section of this newsletter below.

Read more below, and in our reports on mobile payments and electronic money in Japan:

The speed of NFC mobile payments – and why does it take 10 years to reinvent the wheel?
and: what is the speed of Apple-Pay transactions?
faster than 100 milliSeconds? or 500+ milliSeconds?

On July 17, 2012 The Wallstreet Journal reported, that as far as Transport for London is concerned, there is no viable mobile payment solution available at this time, because to the knowledge of Transport for London at that time, mobile payment transactions take longer than 500 milli-seconds, which is too slow for Transport for London requirements (e.g at Picadilly station during the rush hour).

Interestingly, in Japan “mobile SUICA” payments have been used in Tokyo successfully since January 28, 2006 at the world’s busiest railway stations including Shinjuku and Shibuya – arguably more busy than Piccadilly Circus in rush hour, with transaction speeds faster than 100 milli-seconds – according to The Wallstreet Journal, London Transport did not even know about this.

Read in more detail about this issue in our blog here: “Mobile payments: 10 years to reinvent the wheel?

Therefore one obvious question we have about Apple-Pay is whether the speed of Apple-Pay transactions is in the 500+ milli-second range – unacceptable for Transport for London, or faster than 100 milli-seconds – as is Tokyo’s state of the art since January 28, 2006…
I guess we will soon learn the answer to this question.

Why is it that Japan does not capture the global value which Apple and Apple-Developers will create and capture now?

Japan developed mobile payments, e-cash, credit cards in mobile phones and at least as much functionality as Apple-Pay and an open API and a mobile payment and e-cash developer ecosystem over the last 10-15 years.

Why does Japan leave all the global value on the table for Apple and Apple developers?

Actually, I personally had discussions over the last 15 years will all major players in Japan’s mobile payment and e-cash field, crowned by 1-1 discussions with Docomo’s CEO at that time – Dr. Tachikawa – I wrote about one of these meetings in The Wallstreet Journal, of course without mentioning the details: “Wallstreet Journal leadership question of the week – Japanese leadership“.

Essentially my conclusion at that time, and today is, that Japanese companies never showed any interest at all in developing global business to capture the global value of mobile payments, e-cash and the related businesses. Japanese companies did not even try, and were not even interested in discussing the globalization of mobile payment and e-cash technologies and business models.

You can read about Japan’s Galapagos issues here:

All opportunities are not lost of course for Japanese companies in the mobile payments and e-cash fields, but most if not all of Japan’s early-mover advantage has evaporated with Apple-Pay.

In business, sometimes the second or third mover can be commercially more successful than the first mover, and it will be very very hard even for a united Japan Inc to stand up to Apple.

Apple Pay vs Japan’s Osaifu-Keitai: watch the interview on CNBC

Mobile payments Japan, e-money and mobile credit (200 pages, pdf file):

Mobile payment Japan, e-money and mobile credit report

Copyright (c) 2014-2019 Eurotechnology Japan KK All Rights Reserved

Categories
Economics Finance Galapagos effect mobile payment

Will cash become obsolete?

Gave presentation to the Telecommunications Committee of the American Chamber of Commerce in Japan (ACCJ) on October 7, 2009, entitled “Will cash become obsolete? E-money, mobile payments and mobile commerce”.

Talk was attended by about 30-40 executives from major global telecom operators, global banks, new-age payment companies, and from major internet companies.

Outline:

What is money?

  1. Medium of exchange
  2. Unit of account
  3. Store of value
  4. (Standard of deferred payment, unit for debt)

e-Cash value to society:

  • reduced cash handling costs
  • Higher transaction speed
  • Convenience
  • Greater security (especially mobile) vs. reduced privacy

Why should be care? (Summary)

  • Electronic money is here to stay
  • One e-money card/Japanese person
  • 2% of banknotes and coins today
  • YEN 100 billion outstanding
  • YEN 100 billion transactions/month
  • Japan is far in advance, rest-of-world is likely to follow. But can Japan capture the value? maybe not.
  • However: “Galapagos syndrome

More information in our reports:
Mobile payments, e-money and mobile credit in Japan
SUICA and NFC payment for transport
QR codes are also used for payment

Categories
mobile payment

M-payments and e-money grow exponentially

1 Billion e-money transactions/month around 2014

Exponential growth: The number of e-cash payments per month increases by a factor of 10 about every 4 years

E-money transactions (including mobile e-cash) grow exponentially in Japan, and we expect to see 1 Billion e-money transactions/month around 2014 (this figure would be much bigger if contactless train travel tickets were included). e-Money now represents about 2% of all cash (banknotes + coins) in circulation in Japan, a recent examination of e-money by the Bank of Japan shows. More below, and a detailed analysis in our mobile payment and e-money report, where we combine the newest data from the Bank of Japan with our own research data.

Exponential growth: The number of e-cash payments per month increases by a factor of 10 about every 4 years

We expect 1 billion e-money transactions per month around 2014. Green curve shows payments with Suica, Pasmo and Edy (not including train travel). The blue curve shows data for all e-money transactions researched by the Bank of Japan.

Total number of e-money transactions in Japan per month
Total number of e-money transactions in Japan per month

Research by the Bank of Japan shows that e-money has reached the level of 2% of all cash in circulation (bank notes and coins).

e-Money as a percentage of total money in Japan
e-Money as a percentage of total money in Japan

To know more – and to find detailed statistical data: read our mobile payment reports

Mobile payments in Japan vs Apple Pay

https://www.cnbc.com/video/2014/09/16/why-apple-pay-isnt-as-revolutionary-as-it-seems.html

Mobile payment Japan, e-money and mobile credit report:

Copyright 2013 -2019 Eurotechnology Japan KK All Rights Reserved

Categories
media Mobile QR codes Urban

SuiPo – linking posters to mobile phones and IC cards

JR-East introduced SuiPo (Suica Poster).

People who want to participate need to register and link their plastic SUICA card, or their mobile SUICA (wallet phone with installed SUICA application) with a registered mobile or PC email address.

Whenever a registered participants touches the SUICA reader/writer on the side of a poster, links to a campaign homepage, coupons, event announcements or other information is sent to the registered PC or mobile phone email address.

The SuiPo system puts interactivity into posters and allows the advertiser to build an opt-in data base of interested people and to interact with them.

SuiPo = SuicaPoster: linking mobile phones and smartphones to posters for interactive advertising
SuiPo = SuicaPoster: linking mobile phones and smartphones to posters for interactive advertising

More about SUICA: Download our SUICA report

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Categories
mobile payment

Mobile payment and the future of money (presentation at CLSA Japan Forum)

Can e-money and mobile payment replace cash?

Example: mobile payment for the world’s busiest train line

CLSA – Asia-Pacific Markets – last week organized the “CLSA Japan Forum” here in Tokyo. About 800-1000 investment bankers, portfolio managers, investors, analysts came together. Since last year interest of global investors in Japan has increased a lot.

Eurotechnology Japan KK participated actively, and on Friday March 2, 2007, gave a presentation on:

“Impact of mobile payment and the future of money”

Mobile payment and the future of money (presentation at CLSA Japan Forum)

The presentation covers the following agenda:

  • Can e-money and mobile payment replace cash?
  • Example: mobile payment for the world’s busiest train line
  • DoCoMo’s target for mobile payments
  • Japan’s mobile payment and keitai credit landscape
  • Free markets vs regulation
  • Mifare and Felica chips and radio communications (NFC)
  • Who drives mobile payments
  • Growth of SUICA
  • DoCoMo’s mobile payment and keitai credit strategy
  • Edy – electronic cash
  • A major bank’s mobile payment system
  • Impact
  • Where to invest – who to watch
  • Summary

More information:
“Mobile payment and keitai credit” (download here)

Mobile payment Japan, e-money and mobile credit report:

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

Categories
mobile payment

3G Summit and Mobile Payment workshop

Mobile Payment workshop and Global 3G Evolution Forum in Tokyo – Makuhari

3GPP, UMTS-Forum, Verizon and Docomo and others

22-25 January 2007 MarcusEvans organized the “Global 3G Evolution Forum” in Makuhari near Tokyo.

Speakers included:

  • Takanori Utano, Executive Vice-President and CTO of DoCoMo,
  • Takehiro Nakamura of NTT and Vice-Chairman of 3GPP
  • Jean-Pierre Bienaime, Chairman of the UMTS-Forum,
  • Gaston Ormazabal of Verizon Labs

and many other leading mobile communications managers from all over the world.

Jointly with Jan Larsson, General Strategy Manager of TeliaSonera International Carrier division, I chaired all sessions all day on Wednesday January 24, 2007.

Workshop on mobile payments

On Monday, January 22, 2007, I held a three hour workshop about “Mobile Payment”.

Mobile payment Japan, e-money and mobile credit report:

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

Categories
mobile payment

NFC prepaid fare cards are Nikkei Marketing Journals most popular product of the year 2006

Annual Nikkei Marketing Journal (NMJ) ranking list of most successful products

NFC prepaid fare cards ranked near the top of most popular products for 2006

Every year Nikkei Marketing Journal publishes a ranking list of the most successful products of the past year in the form Sumo wrestling results are traditionally displayed: there is a Western side and an Eastern side, winners at the top are displayed in much larger print than also rans at the bottom as in Sumo rankings.

IC tickets are the “Ooseki” (second place) winners on the Eastern side of the Sumo ranking of hit products for 2006.

On March 18, 2007, more than 100 transportation companies of the Tokyo region including 25 train operators which serve a population of around 30 million will introduce PASMO IC-Tickets. Introduction of PASMO will increase market share for IC-tickets and ecash in Japan – and globally.

Read more in the latest edition of our Suica and RFID-Ticket report.

RFID tickets such as SUICA make it to the top of the NIKKEI marketing ranking list in 2006
RFID tickets such as SUICA make it to the top of the NIKKEI marketing ranking list in 2006

Mobile payments Japan, e-money and mobile credit (200 pages, pdf file):

Copyright 2006-2013 Eurotechnology Japan KK All Rights Reserved

Categories
mobile payment

PASMO: IC cards for transport

On March 18, 2007, more than 100 transportation companies (26 railway companies and 75 bus companies) – moving 30 million people of the Tokyo region – will switch to the IC card ticketing and e-cash system named “PASMO”. PASMO will interoperate and partially compete with SUICA.

Preparations go back more than 20 years, when Japan’s national railways started research on IC cards for ticketing. SUICA IC-card tickets were introduced commercially in November 2001 at 424 JR-EAST rail stations in the Tokyo region.

Tokyo’s PASMO combined with SUICA is likely to develop into one of the world’s biggest electronic payment and e-cash systems.

PASMO RFID fare card for the Tokyo region
PASMO RFID fare card for the Tokyo region

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Categories
mobile payment

FeliCa and Mifare cooperation

Paying with the mobile phone in shops and trains, unlocking doors, security check in offices, paying the air ticket and checking in, all just by waving the wallet phone close to a reader/writer unit is addictive – and daily life in Japan today.

SUICA in Tokyo, Octopus in Hong Kong and Oyster in London are great success stories but they use different and incompatible technologies and software.

For mobile payments to take off globally, global interoperability is a must.

NXP (Philips’ former semiconductor division) and SONY on November 20, 2006 announced a cooperation, which will bring global interoperability to wallet phones and mobile payment.

Outline of planned Felica / Mifare cooperation
Outline of planned Felica / Mifare cooperation

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Categories
Mobile

On Germany’s national network about FeliCa wallet phones and other mobile trends

Got interviewed about mobile FeliCa and other mobile trends in Japan by Germany’s largest broadcasting network ARD:

read text of program here

listen to the broadcast here (in German)

Much of this broadcast is based on our presentation: Japan’s telecom sector

Mobile payment Japan, e-money and mobile credit report:

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

Categories
mobile payment

BBC TV interview about FeliCa wallet phones

Read our CEO’s interview on BBC World TV about FeliCa wallet phones.

Watch the movie of the interview:
Windows Media Player – Bandwith = Low|Medium|High
Real Player – Bandwith = Low|Medium|High

Read our report Mobile payments in Japan.

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Categories
ecommerce GPS Leadership Mobile mobile payment QR codes telecommunications

Wireless Japan 2004 exhibition (Tokyo, July 21-23, 2004)

FeliCa mobile payment wallet phones at the centre of attention

by Gerhard Fasol

Wireless, mobile phone industry trends years before they reach outside Japan

Every year the Wireless Japan sets global trends in wireless communications and mobile phones. Mobile phone industry professionals cannot afford to miss this trend setting show. It is here that Japanese carriers and handset makers introduce their latest products and show design studies and concept phones which set industry trends for the next months and years.

There were some surprises: In recent Wireless-Japan shows usually the KDDI/AU-design project prototypes were at the center of attention – this year I could not find any. For example, at Wireless-Japan-2002, KDDI/AU showed “Infobar” prototypes a full 16 months before market introduction. Did KDDI/AU decide to keep future design-project releases secret until they hit the market? Could well be so, given Japan’s increasingly ferocious mobile phone competition. Another surprise was Vodafone’s absence – Vodafone in recent years used to have the biggest show.

On the other hand this time most handset makers showed impressive concept phones, Matsushita/Panasonic under the heading “Beyond 3G”. The image shows NEC’s concept design study of a flexible multimedia phone: this phone has two screens which can be bent together, and used jointly as a larger screen.

Wireless Japan 2004 Highlights: “Beyond 3G”

Beyond 3G: SANYO 3.5G phone for 2.4Mbps data download (for KDDI/AU):

KDDI/AU 3G phone W21SA
KDDI/AU 3G phone W21SA
SANYO show at Wireless Japan 2004
SANYO show at Wireless Japan 2004

Wireless Japan 2004: NEC “tag” wrapping multimedia design concept phone:

Concept model phone by NEC at WirelessJapan-2004 exhibition
Concept model phone by NEC at WirelessJapan-2004 exhibition

“Wireless Japan 2004” – much was expected: for example, it wasn’t surprising for anyone that DoCoMo’s i-Mode-FeliCa wallet-phones were center stage of the DoCoMo exhibit with lots of partners demoing wallet-phone applications.

NEC concept phone
NEC concept phone
NEC concept phone
NEC concept phone

Matsushita/Panasonic “Beyond 3G” design concepts:

Panasonic concept phone
Panasonic concept phone

DoCoMo UbiButton and UbiChip:

DoCoMo's UbiButton and UbiChip
DoCoMo’s UbiButton and UbiChip

DoCoMo i-Mode-FeliCa wallet phones – for electronic cash:

the world's first commercial wallet phone: P506iC - by DoCoMo and Panasonic
the world’s first commercial wallet phone: P506iC – by DoCoMo and Panasonic

DoCoMo i-Mode-FeliCa wallet phones – as an electronic door key:

Mobile phone as a RFID key to lock and unlock doors
Mobile phone as a RFID key to lock and unlock doors

We have substantial documentation about the Wireless Japan 2004 exhibition, and most other year’s Wireless Japan exhibitions. If you need information or documentation for prior art or other investigations, please contact us.

Learn more: report on Japan’s telecom sector (269 pages, pdf file):

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