Alternative marketing thinking

iCONTRACT

Cash, Card Or Cell Phone, Maybe…

An article that should have featured here sometime ago, but it’s here now, looks at the emergence of cell phone as a payment mechanism, albeit differently. This is not the like many of the MPay systems we are reading about, but in Japan, NTT DoCoMo have found a way to embed a small chip in the phone that works as a contactless card. Millions of people are using the system to buy everything from vending-machine sodas to train tickets. To pay, a user passes a chip-enabled handset over a compatible reader. Credit is then deducted from a stored-value account provided by NTT DoCoMo, Japan’s dominant cell-phone carrier. Getting the idea working in the US however is facing a hurdle, not so much from consumers, as much as from not having the infrastructure in place to use such a facility. But that is changing slowly, it seems. While contactless cards have faltered in the United States, mobile-phone banking has taken off. At the end of 2007, 1 million people were using mobile banking. That number is now more than 5 million, and it’s expected to reach 42 million by 2012, according to TowerGroup. Bank of America’s (BofA) program. Watch a flash demo here alone totaled more than 1 million customers in June, about a year after it launched. The browser-based application allows them to check balances, pay bills, view transactions, find branches and ATMs, and transfer funds from their mobile phones. One of the other reasons why the uptake of such and idea in US and many other countries will take a lot more time is the lack of a dominant mobile phone company like NTT DoCoMo in Japan. One other option that is emerging is the association of credit card companies like Visa and mobile service providers. Maybe 2009 is not the best year for an idea like this to really take off, but an interesting look at the many dynamics that come into play when new ideas need mass adoption. More from CFO magazine. A counterpoint to this story is this one in MobileCrunch that states that users in the US don’t trust mobile banking security.

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