Japanese Telcos Launch NFC Couponing Service in Korean District of Tokyo

Japanese mobile operators KDDI and Softbank Mobile have launched an NFC couponing service in a popular Korean district of Tokyo, implemented by an affiliate of South Korea’s largest mobile operator, SK Telecom.

The service enables users to download coupons and redeem them by tapping their NFC phones on readers at nearly 100 merchant locations in Shin-Okubo, a district in Tokyo known for its shops selling Korean food, K-Pop music, cosmetics and other exported Korean goods. The consumers would pay for their purchases separately, less the discounts or other offers they get from redeeming the coupons.

To use the service, the consumers would need smartphones supporting hybrid NFC and FeliCa technology, which Japanese telcos began rolling out last year. Users can download the coupons from a Shin-Okubo app, and can open this app or launch the coupon downloads by tapping tags embedded in smart posters in the district.

In the two weeks since the localized service launched–and without any promotion–Japanese consumers download and redeem coupons a total of about 100 times a day, Jeenwoo Park, manager of the global technology team for the platform R&D office for SK planet, told NFC Times.

SK planet participated in implementing an NFC zone trial in the busy Myeong-dong shopping district of Seoul more than a year ago. Park said the NFC couponing service in Tokyo is modeled after the pilot in Seoul, which tested a range of applications, including payments, loyalty and digital receipts, in addition to couponing.

SK Telecom is also trialing the Shin-Okubo service with its own subscribers, who could use the service when they travel to Tokyo. They would load the Shin-Okubo app to their Android NFC phones. SK planet, which was spun off from SK Telekom in 2011, will try to export the technology to other countries as well, for coupons and other applications.

The pilot with SK Telecom subscribers in Tokyo is not part of the NFC roaming agreement the telco and KDDI and Softbank announced in early 2011, which appears to be focused on payment applications.

South Korea boasts the largest rollout of NFC technology to date. All told, Korean mobile operators had distributed 21.4 million standard NFC phones as of December of 2012, Park told NFC Times. SK Telecom itself has sold 13 million NFC phones.

About 10% of the 13 million SK subscribers with the phones in hand have activated their NFC SIM cards, though Park could not say how often the SK subscribers use NFC services. Use of the phones for retail payment is said to be low.

In Japan, KDDI and Softbank, along with No. 1 Japanese telco NTT DoCoMo, have been distributing hybrid NFC-FeliCa phones since last fall, all or most of them Android phones.

Unlike in Korea, there are still relatively few places to use NFC applications in Japan.

But as NFC Times reported earlier this month, Japan is continuing its transition to standard NFC, with plans by large payment system acquirers to deploy more than 400,000 point-of-sale terminals supporting MasterCard PayPass over the next three years.