In Japan, i-Mode has been around since 1999. Introduced by NTT DoCoMo, it is estimated that i-Mode today has about 53 million subscribers, or nearly half of the Japanese market. At CommunicAsia 2008, held in Singapore in June, the DoCoMo booth featured osaifu-keitai (or ‘wallet phone’) demonstrations to purchase items and even airline tickets. It also showed off its Super 3G speed mobile phones, which achieved a 250 mbps downlink in a Super 3G trial when attached to a laptop. Despite slow growth outside of Japan, i-Mode is the model by which all other countries look at.

Many mobile phone handsets sold worldwide now include a near-field communications device, or NFC. According to the NFC Forum, “more than 60 NFC transport and city life projects are now underway worldwide, enabling consumers to purchase transport tickets, pay for parking, obtain municipal and tourist information, buy products and perform other transactions using their NFC-enabled mobile phones.” Sony in Japan and NXP Semiconductors in Europe have even formed a joint venture called Moversa to create a chip called U-SAM, or Universal Secure Access Module, to produce a chip that can work globally, incorporating the current respective FeliCa and MIFAM operating systems and applications. NXP’s website reports that the initial commercial shipment is planned by the end of 2008. What this would mean for you and me is that you can buy a can of Coke from a vending machine in Japan, and using the same phone, buy some train tickets in Europe and not have compatibility issues or experience a case of ‘phone rage.’

NXP also participated this past January in a pilot scheme for the San Francisco Bay Area Rapid Transit (BART) that gave just over 200 of its EZ Rider card holders a mobile phone with a special NFC chip installed on its motherboard to use as a form of contactless payment to purchase tickets for their commute. BART’s James Fang, on the Board of Directors, noted that during the four-month trial, 165 to 175 of these phones were being used daily by trial participants. Another trial use by customers was the ability to purchase items from Jack in the Box restaurants using the same technology, and hold the phone up to a special ‘smart poster’ that would download into the phone the nearest Jack in the Box locations to you. This was a huge cross-industry effort requiring the participation of the consumer, the transit company, the telecom company, the mobile phone maker, the restaurant and the financial institution. BART’s website also listed ViVotech as contactless payment equipment providers and NFC software developers and Western Union for payment options. Consultants Booz Hamilton’s Willy Dommen said on their website that they were “working to make this a win-win situation for all players.”

According to the Smart Card Alliance, the major credit card companies such as American Express, Discover, Mastercard and Visa already take part in contactless payment point-of-sale systems in the U.S. This could be the core of using NFC-enabled mobile phones as a wallet. And many people, to borrow a phrase, don’t leave home without it. The SCA also projects that consumers would turn to this form of payment system for its convenience, enhanced security and faster transactions.