Report: Japan carriers plan cell phone payment system

Japan's three largest telecommunication carriers and the government will shortly begin working on the creation of an electronic authorization system to allow users to make large-scale purchases from Internet-ready cell phones, according to a report in the Wednesday morning edition of the Nihon Keizai Shimbun, a Japanese daily newspaper.

NTT DoCoMo Inc., DDI Corp. and Japan Telecom Co. Ltd., which between them have a 100 percent share of Japan's wireless market, plan to create in June a council to develop the system, said the report. Membership of the council will be open to other vendors and is expected to include companies such as NEC Corp., Nokia Corp., NTT Data Corp. and Hitachi Ltd, the newspaper said.

The system, tests of which could begin as early as the first quarter of 2002, will be broadly similar to the credit card authorization network and it is expected to employ similar technology although modified for mobile handset use, according to the report.

Japan's cell phone operators are already testing the online commerce waters, and the ability to make payments with cellular handsets will form a central part of the next major upgrade to NTT DoCoMo's popular I-mode wireless Internet service, according to sources at the operator. Earlier this year DoCoMo announced plans to launch a pilot scheme with Coca Cola (Japan) Co. Ltd. and Itochu Corp. that will enable users to buy soft drinks through the I-mode system. DoCoMo is also working with Sony Corp. on the development of its electronic cash system, Edy, which they expect to launch commercially sometime in 2001. Sony hopes 15 million Edy-compatible payment devices and 30 million Edy cards will be in the hands of Japanese shoppers by 2006.

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