Japanese wallet phones

(c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japanese wallet phones (version 16) May 18, 20141
JAPANESE WALLET PHONES
by Gerhard Fasol PhD, Eurotechnology Japan KK

May 18, 2014, 16th edition

free trial version with a few selected pages.

download full report from: http://www.eurotechnology.com/store/walletphone/

EXECUTIVE SUMMARY:  
JAPANESE WALLET PHONES
• Wallet phones are mobile phones (or smartphones) which include a multi-application IC which is both linked to the
applications of the phone and which can communicate securely to external readers/writers via a Near-Field
Communication antenna system

• Wallet phones enable a great variety of functions:

• Applications requiring high security: electronic money, tickets, mobile electronic credit card payments,ATM-cards, building
access cards, employee ID cards etc

• Low security applications: club membership, customer ﬁdelity point cards etc

• Wallet phones enable mobile operators to enter the credit card business via mobile phone based credit cards, and
therefore enable mobile operators to open new business areas

• The world’s ﬁrst wallet phone was the P506iC, which was commercially introduced by NTT-Docomo on July 10th,
2004 with a suite of applications linked to the wallet.

• In the 10 years since 2004, wallet phones have developed and expanded greatly.While traditional Japanese wallet
phones are still widely in use in Japan, Apple iOS and Android based smartphones are rapidly growing in marketshare
and are expanding the universe of wallet phone applications in Japan and globally.
2

VERSION HISTORY - WALLET PHONES
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Version Date Content added, updates
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4 May 19, 2004
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VERSION HISTORY - WALLET PHONES
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Version Date Content added, updates
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14 March 29, 2007
15 August 12, 2008
16 May 18, 2014
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AGENDA - WALLET PHONES
• Executive summary: wallet phones

• The Concept:What are wallet phone and why

• Hard ware, software platform and systems

• Hardware etc

• Security and Privacy

• Mifare, Oyster, FeliCa-Mifare interoperability

• The Eco-System, and applications

• FeliCa Networks Inc -The Company

• Applications

• Mobile Credit: DoCoMo’s entry into credits and consumer loans

• Mobile credit platform iD, and DCMX

• QuicPay

• Electronic Cash and electronic/mobile payments in Japan

• Edy and BitWallet

• Tokyo Mitsubishi UFJ mobile banking and Edy

• Jibun Bank

• ToruCa,Town Pocket, i-Touch and related services

• Initial core applications and the wallet phone roll-out

• Competitive market place

• KDDI

• Vodafone wireless IC card phone

• Mopass

• Summary
6

THE CONCEPT - 
 
WHAT ARE WALLET PHONES 
AND WHY
7

WALLET PHONES
• Wallet Phones are mobile phones with built-in multi-application IC-chips, plus the near
ﬁeld communication (NFC) systems which enables the on-board chip to interact with a
reader/writer terminal

• In addition, for a complete wallet phone eco-system, JAVA applications and network
infrastructure and specially developed reader/writer units at point of use (e.g. railway
stations, store cash registers, POS, etc), and back-ofﬁce systems and servers for transaction
processing are required.

• DoCoMo conducted public tests between December 2003 and June 2004 for 5000 users
and introduced wallet phones commercially from July 2004.

• We estimate that in mid-2007 about 30 million wallet phones are in use in Japan, while
we estimate that about 50 million wallet phones will be in used by 2010 and we expect
growth to continue without drastic changes
8

IMPLICATIONS FORTHE MOBILE CARRIER
• Wallet phones will form part of the essential daily life
infrastructure - unlike multimedia and music maybe addictive
but are non-essential

• Thus wallet functionality takes the carrier’s services from the
periphery into the center of the customer’s lives

• Carriers will move to a different business model: from charging
for minutes and kilobytes, to management fees for
authentication platforms, transaction platforms, identity
management fees etc.
17

HARDWARE, SOFTWARE
PLATFORM AND SYSTEMS
18

WALLET PHONE SYSTEM OVERVIEW
• The ﬁgure on the left hand side shows an
overview of the complete wallet phone
system implemented by DoCoMo.

• DoCoMo’s wallet phone system is a platform
for a wide range of applications ranging from

• high-security applications including
electronic money, electronic banking,
travel tickets, workplace access cards etc
down to

• relatively low-security applications such
as sports-club membership cards, or
customer ﬁdelity point cards.
19

FELICA AND MIFARE
31
Card FeliCa Mifare
Developer/

owner
SONY
Developed by Mikron in
Austria

Acquired by PHILIPS
Major
Deployment
SUICA & Icoca/Japan

DoCoMo wallet phone

Octopus/Hong Kong

Edy/Japan
Oyster/London

Credit cards
Cards sold
Felica IC 170 million

(incl 30 million mobile)
1.2 billion
Readers 7 million

SECURITY AND PRIVACY
34

THE ECO-SYSTEM
40

 
FELICA NETWORKS INC. 
 
THE COMPANY
44

APPLICATIONS
• This section gives a short overview of some applications of wallet phones. For a more complete description of mobile
payments and m-commerce in Japan and for many more applications of wallet phones see:

• http://www.eurotechnology.com/store/mobilepay/

• http://www.eurotechnology.com/store/suica/

• http://www.eurotechnology.com/store/cmode/
47

MOBILE CREDIT: 
DOCOMO’S ENTRY INTOTHE CREDIT
AND CONSUMER LOANS BUSINESS
• This section gives a short overview. Read in detail in our “Mobile payment and
keitai credit report”:

48

DOCOMO’S STRATEGIC INVESTMENTS
• DoCoMo’s controlling investment in Mitsui Sumitomo Credit Card Corporation is part of several strategic
investments during 2005

• The overall purpose of these investments is to develop income streams which are independent of data or
voice trafﬁc
54

ID – DOCOMO’S MOBILE CREDIT
PLATFORM

55

POSTERMINAL FOR “ID” - USED ONCE/MONTH?
• On December 1, 2005 Mitsui-Sumitomo Cards launched the iD branded keitai credit service

• Picture on the left hand side show reader/writer terminal for iD compatible cards

• The staff of an excellent restaurant/bar inTokyo with a similar iD read/write payment terminal recently told us that this iD terminal is
used about once per month, so clearly it will be a long process to bring iD to mainstream customer acceptance (asked why the
restaurant installs and keeps a payment system which is only used once per month, we were told this was because the investment
company owning the building is related to the NTT-DoCoMo group, and requires installation of DoCoMo’s payment system for all
tenants including this restaurant. Clearly, commercial power helps…)
57

PROMOTING DOCOMO’S MOBILE
CREDIT PLATFORM ID
keitai credit report”:http://www.eurotechnology.com/store/mobilepay/
59

PAYINGTAXI FARES WITH MOBILE CREDIT ID
• DoCoMo created arrangements with a number of taxi operators in theTokyo region to accept iD mobile phone payments based on
DoCoMo’s iD mobile credit payment

• Mobile credit payment is linked with DoCoMo’sToruCa system: when paying the taxi fare, the mobile phone picks up an information
message/advertisement from theTaxi company
60

DCMX – DOCOMO’S MOBILE AND
CARD CREDIT BRAND

61

ELECTRONIC CASH AND 
ELECTRONIC/MOBILE PAYMENTS IN
JAPAN
66

EDY ELECTRONIC CASH 
(PRE-INSTALLED IN ALL I-
MODE-FELICA PHONES)
74

BITWALLET KK (NOW RAKUTEN EDY KK)
• Business:

• Planning and management of prepaid electronic money business (Edy)

• Development of companies issuing prepaid electronic money, and of shops
accepting it

• Management of the “Edy” brand

• Company Foundation:

• January 18, 2001

• Paid in capital:

• YEN 21,453.5 Million (US$ 214 Million)
75

EDY IN FELICA WALLET PHONES
87

I-MODE-FELICA: P506IC “WALLET PHONE” SCREEN IMAGES 
EDY ELECTRONIC CASH
• Menu showing remaining balance (here:YEN
100) for “Edy” electronic cash

• Screen shows the display from the Edy JAVA
application

• The JAVA application reads the remaining
balance from the FeliCa card built-into the
mobile phone

• Note that the electronic cash is stored
directly and securely in the FeliCa chip
onboard the phone - access to a remote
server is not necessary to display the balance
or to make payments or charging/reﬁlling
92

EDY GIFT
93

TOKYO-MITSUBISHI-UFC  
MOBILE BANKING  
AND  
EDY
97

JIBUN-BANK 
BY KDDI ANDTOKYO-
MITSUBISHI UFJ BANK
104

JIBUN (=“SELF”) BANK
• Responding to DoCoMo’s move into credit card and payment
services, KDDI responded by creating “Jibun Ginkou” (= Self-Bank)
in cooperation withTokyo-Mitsubishi UFJ.

• Jibun-Bank created a full banking interface for mobile phones and
allows account management, including payments, transfers, bill
payments etc from the mobile phone.

• As part of the Jibun-Ginkou Bank service, KDDI also offers Credit
Cards.The former “KDDI-The-Card” has been merged into a new
AU-Jibun-Bank Card during 2008.

• KDDI offers Jibun-Bank not only to KDDI/AU subscribers, but also
to subscribers of competing mobile operators.

• For details on Jibun Bank see our report:

• http://www.eurotechnology.com/store/kddi/
105

DOCOMO’STORUCA SERVICE
106

“TOWNPOCKET”,“I-TOUCH”AND OTHER
“TOUCHTO ACTIVATE” SERVICES
110

TOWNPOCKET
• The “Town-pocket” service is
typical for class of services,
where the user touches a
terminal with his mobile Felica
wallet phone to trigger a
determined action

• The action can be to register a
bookmark in his/her phone, to
receive an email with information
etc.
111

“I-MODE-FELICA PREVIEW SERVICE” 
(JANUARY - JUNE 2004)
113

“I-MODE-FELICA PREVIEW SERVICE” 
(JANUARY - JUNE 2004)
• As usual in Japan, before introducing wallet phones to the general public, DoCoMo tested
wallet phones with 5000 “monitors” during a 6 months long testing period from January
to June 2004.

• The following section describes this testing phase of wallet phones.

• Note that the transaction partners during the testing phase are not all exactly the same as
those during the introduction phase to consumers from July 2004.Although we are not
aware of an announcement by DoCoMo, we assume that some transaction partners
either dropped out during testing, or postponed participation, while other new partners
joined during the testing phase.

• The following description of the testing phase gives a good indication of the likely
development of wallet phones in the initial period of introduction.
114

I-MODE-FELICA WALLET-PHONE SERVICES 
 
AFTER INTRODUCTION  
ON JULY 10, 2004
115

INITIAL ELEVEN (11) I-MODE-FELICA WALLET-
PHONE SERVICES 
 
FROM JULY 10, 2004
119

TWENTYTHREE (23) I-MODE-FELICA WALLET-
PHONE SERVICES 
 
AFTER AUGUST 2004 AND BEYOND
122

“I-MODE-FELICA” SERVICES AFTER AUGUST 2004 (4)
• Matsumoto Kyoshi (Chemists, toiletry stores) from August 2004

• Edy ecash

• Point card

• Softbank mobile (mobile internet services,ASP) from August 2004

• Membership card (point card)

• e-Tickets, e-Coupons

• YaMaYa (Food and wine stores) from August 2004

• Edy payment

• Membership card (point card)

• UFJ Card (consumer ﬁnance, credit cards)

• Credit payments

• UC Card (consumer ﬁnance, credit cards)

• Electronic payment

• Company employee card
126

BIC CAMERA  
CUSTOMER CARD
127

BIC CAMERA MEMBERSHIP CARD
• BIC camera stores membership
point card can be stored in FeliCa
wallet phones.

• When the customer purchases at
BIC-Camera, he/she places the
FeliCa wallet phone on a FeliCa
reader/writer at the cash register,
and the points corresponding to
the purchase are registered on his/
her customer ﬁdelity account

• The FeliCa wallet phone serves as
the customer club card
128

BIC CAMERA MEMBER REGISTRATION
• To register for membership for his/her FeliCa wallet phone the customer ﬁlls in a form, and a
QR-code contains the memberships number in encoded form, as well as providing access to
the URL to download the membership JAVA application, which has access to the FeliCa chip

• More about QR-codes: http://www.eurotechnology.com/store/qr/
129

YODOBASHI CAMERA  
CUSTOMER CARD
130

“I-MODE-FELICA” EXAMPLE:  
 
KARAOKE MEMBERSHIP CARD
133

ELECTRONIC DOOR KEY
135

COCA-COLA’S C-MODE
(NOW COCA-COLA PARK)
• In the meantime, Coca-Cola has transformed C-mode into “Coca Cola Park”

• More about mobile payments for vending machines:

• http://www.eurotechnology.com/store/cmode/

• http://www.eurotechnology.com/store/suica/
137

 
FOR XEROX COPY MACHINES
142

 
SEGA GAME PARLORS
144

 
TICKET-PIA
148

 
AM/PM CONVENIENCE STORES
151

EXAMPLE:AM/PM CONVENIENCE STORES
• Electronic cash payments at point of sale (POS) terminals

• offers and new content for “club-ap”
153

 
ALL NIPPON AIRWAYS ANA
157

PHONES ASTRAINTICKETS 
 
FROM 2005/2006 “MOBILE SUICA” CONVERTS I-MODE/FELICA
PHONES INTOTRAINTICKETS 
 
 
READ MORE ABOUT SUICA: 
HTTP://WWW.EUROTECHNOLOGY.COM/STORE/SUICA/
163

SUICA FOR FIRST-CLASS E-TICKETS
• From 2005/2006 SUICA functions will be integrated into mobile FeliCa wallet phones.Train tickets, season
tickets, 1st Class (Green) tickets, SUICA eCash will be integrated into mobile phones
168

THE COMPETITIVE PICTURE: 
DOCOMO, KDDI/AU ANDVODAFONE /
SOFTBANK 
… FELICA AS A COMPETITIVETOOL
171

EZ-FELICA 
KDDI’S WALLET PHONE 
 
 
FOR MORE ABOUT KDDI: 
HTTP://WWW.EUROTECHNOLOGY.COM/STORE/KDDI/
174

KDDI’S WALLET PHONE: EZFELICA
EZ FeliCa in the game parlor
177

VODAFONE KK’S WALLET PHONE
CONCEPT (VODAFONE SOLD JAPAN
OPERATIONSTO SOFTBANK AND
TERMINATED BUSINESS IN JAPAN)
178

VODAFONE WIRELESS IC-CARD PHONE
• In response to DoCoMo’s development of I-mode/FeliCa wallet phonesVodafone
(Japan’s third largest mobile carrier, now SoftBank, see: http://
www.eurotechnology.com/store/softbank/ ) initially announced the development
of an alternative wireless card system.

• Vodafone (now: SoftBank) seemed initially not to join DoCoMo’s “mobile FeliCa”
system, but to develop an independent approach.

• Vodafone (now: SoftBank) announced it’s own contactless IC-Card on May 6,
2004, about 6 months after DoCoMo started the ﬁeld trials described elsewhere
in the present report.Vodafone clearly still has to create the industry alliances,
which DoCoMo already has achieved in Japan.

• WhileVodafone (at that time under the name J-Phone) was the leader in Camera
phones,Vodafone is now clearly the follower. However, that is not necessarily a
bad thing, especially sinceVodafone is much stronger outside Japan than DoCoMo.
It is quite likely thatVodafone will introduce these smartcard systems in Europe
and elsewhere about 3-4 years down the road asVodafone has done for Camera
Phones,Vodafone-Live! and other services and technologies.
179

VODAFONE WIRELESS IC-CARD PHONE
• In 2004,Vodafone tested the J-SH53X mobile phone (by SHARP) with
wireless smartcard functions with the following properties:

• Card interface and antenna are built into the J-SH53X body

• Smartcards, including flash memory are not built into the phone body but are pushed
into a separate card slot. Smartcards can therefore be exchanged.

• IC cards can have contact and no-contact interfacing

• Two different card types have been tested/developed in cooperation with
Hitachi:

• For traffic applications and other business fields: JICSAP2.0, EEPROM: 32 KByte, Flash
memory: 64 MByte

• For finance, public administration and other business fields: ISO14443Type B,
EEPROM: 32 KByte, Flash memory: 64 MByte
180

VODAFONE WIRELESS IC-CARD PHONE J-SH53X 
ANNOUNCED MARCH 6, 2004
• Vodafone’s J-SH53X phone with
wireless smartcard.

• We expect that this system enables
similar technical functions and
applications to DoCoMo’s I-mode/
FeliCa system.

• However, we have not yet seen the
wide network of partners which
DoCoMo has signed up in order to
achieve market penetration.
181

VODAFONE’S WALLET PHONE STRATEGY
• On March 6, 2004Vodafone announced it’s own contactless
smart-card based wallet phone system, and exhibited the J-
SH53X prototype wallet phone.This system appeared to be
independently developed from DoCoMo/SONY mobile FeliCa,
most likely based on Europe’s PHILIPS Mifare system

• On February 24, 2005Vodafone announced to follow KDDI/AU
in licensing the mobile FeliCa system from FeliCa Networks.
182

MOBILE FELICA AND 
MOPASS
183

SUMMARY
187

SUMMARY:  
WALLET PHONES
• Wallet phones are mobile phones which include a multi-application IC which is both linked to the applications of the
phone and which can communicate securely to external readers/writers via a Near-Field Communication antenna system

• Wallet phones enable a great variety of functions:

• Applications requiring high security: electronic money, tickets, mobile electronic credit card payments,ATM-cards, building access
cards, employee ID cards etc

• Low security applications: club membership, customer fidelity point cards etc

• Wallet phones enable mobile operators to enter the credit card business via mobile phone based credit cards, and
therefore enable mobile operators to open new business areas

• Wallet phones can in principle store many if not all functions of wallets: cash, credit cards,ATM cards, train tickets, room
keys, building access, membership cards etc.Today the memory or wallet phones is still limited, so that in reality not all
these items can be stored at the same time in today’s wallet phones. Futher development of wallet phones is necessary
until wallet phones can fulfill all the functions of our wallets

• The world’s first wallet phone was the P506iC, which was commercially introduced by NTT-Docomo on July 10th, 2004
with a suite of applications linked to the wallet.

• In the 10 years since 2004, wallet phones have developed and expanded greatly.While traditional Japanese wallet phones
are still widely in use in Japan, Apple iOS and Android based smartphones are rapidly growing in marketshare and are
expanding the universe of wallet phone applications in Japan and globally.
188

MORE INFORMATION:
• Blogs:

• http://fasol.com/blog/

• http://eurotechnology.com/blog/

• Reports:

• http://www.eurotechnology.com/store/
189

CONTACT AND FURTHER INFORMATION
• Eurotechnology Japan KK

• http://www.eurotechnology.com/

!
• reports:http://www.eurotechnology.com/store/

• twitter: http://twitter.com/gfasol/

• website: http://www.eurotechnology.com/
190

Japanese wallet phones

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