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JCB Pilots Payments via Mobile Phone

Embedded smart card allows contactless payments.

Though it's common in the U.S. for consumers to pull out plastic for virtually all of their purchases, that practice is still a long way off in Japan. For a credit card company such as JCB (Tokyo), the challenge is to encourage card usage in a cash-based society.

"Paying by cash rather than a card seems to be respected," says Tac Watanabe, senior vice president in JCB's advanced technologies department. "But things seem to be changing, particularly with the younger generation."

JCB is addressing this market by emphasizing speed and ease of use. In conjunction with mobile communications company NTT DoCoMo and AEON Credit Service Co., customers will be able to use a contactless payment device embedded in a mobile phone to make small-value purchases at properly equipped terminals.

Customers will also be able to use smart cards to make purchases. Already, over half of JCB's customers have an integrated circuit (IC) chip card, and by the end of March 2005, JCB expects to have 100,000 IC-capable card terminals in Japan.

The deployment of contactless payment will be focused on stores that have a high volume of low-value transactions, such as convenience stores and supermarkets, according to Kazuhiro Matsumoto, EVP and general manager, advanced technology department, JCB. The IC card technology will also target businesses with high rates of card fraud, he adds.

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