Long before Google Wallet, ISIS or Quick Tap — in fact, way back in 2004 — Japan’s leading mobile operator, NTT DOCOMO, pioneered a near-field communication (NFC) platform called “Osaifu-Keitai” (“mobile wallet” in Japanese) based on Sony’s “FeliCa” contactless chip. In the years since, DOCOMO has developed some of the world’s most varied and sophisticated NFC applications for commercial services. And now, the company is sharing its commercial deployment know-how with mobile operators and service providers in the growing worldwide NFC ecosystem.

According to Norio Nakamura, executive director of NFC Services and Innovation, the key benefits of NFC are speed, simplicity and customer data accumulation. “Since most convenience stores are equipped for NFC payments, it’s possible to pay for items quickly, without ever having to take out one’s leather wallet and fumble with bills or coins. There also is no need to carry coupons or membership cards, and you can top-up money online if your mobile wallet balance is low.”

He adds, “Mobile coupons and promotions are virtually cost-free, unlike printed advertisements and coupons, and they remain on the person at all times, saved in their phones, to encourage store visits. Furthermore, merchants can easily track the effectiveness of promotions and collect data on customer behavior, so mobile NFC also represents a powerful marketing tool.”

Keys to Success

Why has DOCOMO been so successful in expanding its mobile NFC market over the past seven years? A primary reason has been its approach to strategic partners. By effectively explaining the NFC concept and its many merits, as well as making strategic investment alliances to accelerate the deployment of reader/writer terminals in proprietorships, DOCOMO has won the cooperation of leading companies in a number of industries. In 2005, a major win came in the form of a partnership with JR East, the leading railroad responsible for transporting many millions of paying customers everyday in the region surrounding Tokyo.

DOCOMO also has been successful in developing NFC-based promotions with powerful partners such as McDonald’s. A loyalty program created by the two companies, for example, enables users to go to McDonald’s mobile website to quickly and easily download coupons, which they can redeem for discounts with a single tap when paying in shops.

And finally, other mobile phone operators have chosen to adopt the Osaifu-Keitai platform, turning it into the de facto standard for mobile payments in Japan.

Global NFC

Having pioneered the mobile NFC market in Japan, DOCOMO is now working with strategic partners on NFC-based services that will span international borders. The company also plans to maximize the global potential of its NFC technologies by deploying handsets equipped with NFC chips that comply with global standards, ensuring use with reader/writer infrastructure both in Japan and overseas.

DOCOMO has formed tie-ups with strategic partners such as Visa Inc. (payment technologies), Samsung Electronics Co., Ltd. (NFC chip and mobile handset production) and Gemalto N.V. (SIM card vending). Cross-border services also are being developed with Sumitomo Mitsui Card Co., Ltd. and bitWallet, Inc.

The first commercial international collaboration will be with South Korea’s leading telecom operator, KT Corporation. Customers travelling between South Korea and Japan will be able to roam with compatible Android handsets to access services for mobile payments, mass-transit passes, coupons and more toward the end of 2012.

NFC Standardization Worldwide

International standardization and industry organizations are developing common specifications for NFC technologies and the related ecosystem of network providers, hardware vendors, retailers, payment processors and other stakeholders.

DOCOMO, a member of both the NFC Forum and GSMA, is actively involved in this process, as well as efforts to promote NFC and create greater awareness and understanding of the technology’s applications and benefits.

The GSMA’s publicly released M-Payment Service Operation Guidelines for Mobile Network Operators, for example, incorporate know-how that DOCOMO developed for Osaifu-Keitai, such as operational guidelines for security measures that disable NFC functionality when a handset is lost or stolen. Thanks to the efforts of NFC leaders such as DOCOMO, the guidelines are expected to encourage more mobile operators and service to enter the NFC field. To download the guidelines, visit www.gsmworld.com/our-work/mobile_lifestyle/mobile_money/news_and_resources.htm