NTT DoCoMo will let Japanese customers make credit card purchases with their mobile phones from December, the company has announced.
The service will be branded "iD" and will launch on cards issued by Sumitomo Mitsui, a major Japanese credit card company. The system will be open to other card issuers and NTT DoCoMo hopes to get all major issuers on board as soon as possible.
ID will become a credit card brand for contactless cards in the same way that Visa and MasterCard are for magnetic stripe cards, according to the company. NTT will receive a commission for payments made through the iD infrastructure that will vary depending on terms agreed with card issuers and retailers. For conventional cards, it is about 0.2 percent.
The system will work with handsets based on Sony's Felica contactless smart card technology, which is fast becoming common in Japan. Felica works over a distance of a few centimeters and means handsets have only to be brought near a reader in order to communicate with it.
NTT launched its first cell phone handset with support for the Felica system in July 2004, and there are currently 7 million users with one of 12 handset models on sale. NTT expects this to reach 10 million by the end of March 2006.
At present those phones can be used with applications such as the Edy e-money service, building access, airline e-ticketing and store loyalty programs. They will soon be joined by East Japan Railway's Suica contactless travel ticket system, which is based on the same Felica technology but available currently only with smart cards issued by the railway operator.
The addition of Suica will make it possible to travel to work, buy a coffee while walking to the office and gain access to the building all by swiping a cell phone near to the appropriate readers. The launch of iD will add the ability to make higher-value purchases.
Retailers must install suitable card readers in their stores in order to start accepting payments with the iD system. Sumitomo Mitsui Card hopes to have compatible readers in 100,000 shops across Japan within a year from the launch of the service, it said.
Despite its name, no iD number will need to be entered for payments less than 10,000 yen (£50), only for those over that amount.