NTT DoCoMo iD DCMX in Japan
In Japan, the mobile money market started more than a decade ago when NTT DoCoMo introduced i-mode phones and their supporting payments ecosystem.
Although there are six or seven contactless card payment systems in the market place, there are relatively few debit and credit cards in circulation; Japan is still a heavily cash-based economy. Japanese people typically go to the cash till, take out substantial sums, pay for things in cash and, in the evening, they go and put what is left back in the bank.
The proximity payments sector is very competitive. The transit companies have a contactless card whose use has been extended to enable people to pay in ...view middle of the document...
NTT DoCoMo has been successful in introducing a credit product into Japan, which is not a credit-oriented society.
“In Japan you have a phone with iD [wallet], then there are a number of ‘slots’ that consumers can load different services into – so any bank is free to offer a credit product that fits into iD, although most of them are from DoCoMo, called DCMX. When you buy a DoCoMo phone, they all come with the DCMX product loaded into them and ¥100 of credit, which you can call up and extend if you wish,” says Birch. “To the consumer, it looks like it’s being done by the operator, although it’s all being done by Sumitomo Mitsui. They probably have 15 million DCMX users active now – it’s gone through the roof, relative to the market norm. So if you marry the product to the mobile properly, like DoCoMo, then the predilection of the customer to use those products soars.”
There are two other very interesting elements to this strategy. Contrary to common perception, it appears- according to a Consult Hyperion blog- that the number of mobile proximity payments made in Japan fell during 2010 (with about 10% of all mobile subscribers making a mobile proximity payment during December 2010, or about 9.8 million users). It seems that consumers found that mobile payments involved pushing too many buttons on their phone and having to wait for...