Japan is continuing its transition to standard NFC, with plans by large acquirers to deploy more than 400,000 point-of-sale terminals supporting MasterCard PayPass and confirmation by the No. 3 mobile operator that it has hired an outside trusted service manager as it prepares to introduce NFC services.
MasterCard Worldwide announced that large acquirers Mitsubishi UFJ Nicos, Sumitomo Mitsui Card, Orico Corp. and UC Card have set a target to deploy 410,000 PayPass-enabled terminals in Japan over the next three years. It’s not clear whether MasterCard is helping to fund the rollout of contactless POS terminals, as it has in some other countries.
If the acquirers hit the 410,000-terminal goal, it would be by far the largest infrastructure of POS terminals supporting standard contactless technology in Japan, which is dominated by proprietary FeliCa technology from Sony Corp.
Those FeliCa terminal numbers have been placed at more than 1 million in the past, while PayPass-enabled terminals have run into only the hundreds or few thousands, used mainly for NFC trials.
The PayPass infrastructure would help clear the way for Japanese banks and other financial institutions to issue cards and applications for NFC phones supporting PayPass, which follows the international ISO/IEC 14443 contactless standard.
FeliCa is not included in the 14443 standard, which forms the underpinning of NFC payment applications using card emulation. While the NFC standard itself supports FeliCa, standard NFC phones cannot be used at FeliCa terminals in Japan.
The massive base of FeliCa terminals support such payment schemes as iD from NTT DoCoMo, Japan’s No. 1 telco and the leader in rolling out FeliCa-based mobile wallet phones since 2004.
DoCoMo announced a deal with MasterCard last fall that this year would enable users of iD to tap their phones outside of Japan at PayPass terminals, while continuing to use FeliCa-based iD for domestic purchases. In either case, the purchases would come out of the customer’s iD account. They would use phones with hybrid NFC and FeliCa technology, which DoCoMo began introducing last fall, and which other Japanese telcos are also introducing to parts of their device lineups.
MasterCard said at the time that while it would continue to support its PayPass customers in Japan, it would also focus on working with DoCoMo to enable the telco’s customers to make PayPass payments outside of Japan.
A spokesman told NFC Times today that “this MasterCard contactless terminal deployment is in alignment with MasterCard’s contactless strategy and is independent from our alliance with NTT DoCoMo.”
The MasterCard announcement Friday noted only that the planned deployment of PayPass terminals in Japan would enable “cardholders traveling from abroad” to pay with PayPass. But the MasterCard spokesman, in response to a question from NFC Times about whether the PayPass infrastructure would encourage Japanese issuers to roll out PayPass domestically, said the terminals will “accept MasterCard contactless cards or devices from anywhere in the world.
“This means that both Japanese and overseas cardholders can take advantage of the convenience of making contactless payments at more merchant locations.”
It’s possible some of the FeliCa POS terminals in Japan could be upgraded to also support PayPass without replacing the hardware, since some of the terminals already support the ISO 14443 standard.
Meanwhile, France-based Gemalto, in announcing its trusted service management contract with Japan’s No. 3 mobile operator, Softbank Mobile, said that Japanese banks are “increasingly throwing their weight into mobile-payment services, (and) Japanese mobile subscribers will have more access to a rich portfolio of NFC services which also include e-ticketing and loyalty programs.”
Gemalto also provides early TSM services to Japan’s No. 2 telco, KDDI, both believed to be expensive platforms, which the telcos plan to use to manage NFC applications on their NFC SIM cards for their hybrid NFC-FeliCa phones.
Gemalto is also believed to be supplying the NFC SIMs to all three major Japanese telcos, DoCoMo, KDDI and Softbank.
Unlike KDDI and Softbank, DoCoMo has mainly described its interest in standard NFC in terms of enabling its subscribers to use services when they roam, and the telco has NFC service roaming agreements with South Korea’s KT and China Mobile.