October 03, 2002, 10:06 AM — Japanese cellular carrier KDDI Corp. will begin trials next year of a system that allows cell phone users to make credit card purchases online or in stores using their mobile handsets, it announced this week at Ceatec 2002. The carrier is the first in Japan to announce plans to trial the service, which is already entering commercial use in South Korea.
The system is based around a credit card Java applet stored on the telephone's smart card and the Infrared for Financial Messaging (IrFM) Point and Pay profile that was published by the Infrared Data Association (IrDA), the standards setting body for infrared systems, in February this year.
When in stores that support the system, users will be able to beam their credit card details from their handsets using infrared. It can also work with merchants on the mobile Internet, allowing users to make purchases faster by not requiring them to tap in their credit card details.
At present, KDDI's CDMA (Code Division Multiple Access) handsets do not include user smart cards. However the carrier is working with Hitachi Ltd. to come up with a suitable handset in time for the trial, which is scheduled to begin in March next year and last for 5 months, said a KDDI representative at Ceatec.
The trial will be conducted by KDDI and credit card issuers Toyota Finance Corp., JCB Co. Ltd., UC Card Co. Ltd. and Sumitomo Mitsui Visa Co. Ltd.
Such a payment service is already a commercial reality in South Korea. Local company Harex InfoTech Inc. started service earlier this year with local cellular carriers KT Freetel Co. Ltd. and LG Telecom Co. Ltd. Under the name MZoop, the company hopes to sign up 200,000 merchants to its system by the end of the year.
In addition, Harex is conducting trials of the service using Handspring Inc. Treo PDAs (personal digital assistants) at the University of Southern California's Marshall School of Business. The university bookstore and USC Federal Credit Union will be among the organizations participating in the trial.
Back in South Korea, cellular carrier SK Telecom Co. Ltd. is working on launching a commercial service based on an IrFM based payment service. The company is working with Visa International Asia-Pacific Ltd. to turn local trials in Seoul into a nationwide payment service.