Japan credit card cos form 'mobile wallet' alliance
Industry News

TOKYO (Reuters) - Japan's credit card companies, headed by Japanese top-ranked JCB Co., formed an alliance on Tuesday to promote a standard that will allow use of mobile phones in lieu of credit cards regardless of the issuer. The organization, which also includes mobile operators KDDI Corp. and Vodafone Group Plc's Japan unit, said it aimed to set up an infrastructure to drive usage for the system, which it calls QUICPay, using Sony Corp.'s smart chip.

Users of most popular credit card issuers would be able to use their phones to pay for items at any store equipped with a QUICPay scanner. The amount of purchase would be charged on their regular credit card bills. The so-called "wallet phones" are ultimately intended to replace cash, credit cards, identification cards and electronic plane or train tickets.
Credit card companies are hoping the convenience of the wallet phone will increase payments by credit card in a nation where only a single-digit percentage of consumer purchases are charged. Mobile phone operators hope the added feature will help grow revenue as well as make it harder for users to switch service providers.

While all of the operators will have phones with the feature by the end of the year, NTT DoCoMo Inc., Japan's largest mobile operator, has held the advantage until now because it launched the first wallet phone last year, about a year ahead of its competitors. DoCoMo, which has sold over 5 million wallet phones, said in April it would invest in Sumitomo Mitsui Financial Group Inc.'s credit card firm under a deal in which the two companies would develop a similar service.

The new organization denied that its move was a reaction to DoCoMo and Sumitomo Mitsui Card Co. Ltd.'s partnership and said it was open to everyone, but both the No. 1 operator and the No. 2 credit card firm were absent from the membership list.

The mobile transaction alliance has 39 member companies so far including Mastercard International Japan Inc., UFJ Nikos and Toyota Motor Corp. . It expects to sign on 10 more companies including Fujitsu Ltd.

Reuters 2005. All Rights Reserved.

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