Japan to use mobile phones as credit cards

DoCoMo, Japan’s biggest mobile phone provider, is planning a new service allowing customers to pay for goods with their mobile phone handset.

A version of this service is already in action in Scandinavia but is only just being rolled out in Japan as the Japanese do not use credit cards as much as the rest of the world. In fact only 10% of consumer spending is on a credit card compared to 25% in the US.

People in Japan seem reluctant to use any kind of credit or debit card. “I’ve had bad experiences with loans,” said Takamichi Takizawa, in his early 30s. “I just stick to cash now. I bet there’s no-one around here who uses a mobile phone credit card – or who’s even heard of them.”

Paying for goods using a mobile phone is simple. Users just need to wave their phone in front of a dedicated electronic reader in the store and they are billed for the purchase along with their monthly phone charges.

As the Japanese mobile phone market reaches saturation point companies are looking for new ways to drive profits. DoCoMo earns a commission from the retailers who offer the service as well as earning interest on credit balances.

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