IEEE Technology and Society Magazine - Fall 2013 - 23

DoCoMo is attributable to collaboration between merchant and transport players as well as aggressive measures to expand the mobile payment infrastructure,
including licensing the system to competitors.
felica generates revenue from the following:
1) commissions from paying in advance for consumers 2) sharing credit card fees from post-payment services provided in conjunction with Mitsubishi Bank,
and 3) licensing fees from developers using felica
network infrastructure. Applications range from
transportation application to on-line shopping. Examples include small-scale shopping without cash (Edy:
pre-paid e-money), boarding passes, flight tickets,
membership authentication, loyalty points, transportation payment (Mobile Suica), e-tickets, membership cards, on-line shopping with Sony finance, and
office ID cards.
felica's business is increasing driven by the supply of devices and the growing number of franchises.
felica has been supported by environmental factors
including a high concentration of population within
cities, a high ratio of cash usage to total transaction
volume, and high dependence on public transportation.
NTT DoCoMo introduced and demonstrated NfC
feliCa phones at the Mobile World Congress (MWC)
2011 that it supported both the NfC standard and
felica. NTT DoCoMo was limited in that the technology was only useful in the Japanese market and did
not exploit the full potential of its preemption. The
MWC demonstration shows NTT DoCoMo's efforts
to pursue technology evolution as a mode of entry to
the global market.
Case 2: Google and Apple
Google introduced "Google Wallet" (a mobile payment system) and "Google Offers" (mobile coupons)
on May 26, 2011, in collaboration with Sprint, MasterCard, Citi bank, Macy's, Subway, and first Data
[5]. They are expected to be offered to all Androidbased smartphone users soon. Google Wallet is an
application that saves the user's identification, credit
card number, and membership card information on
his/her phone, allowing the phone to replace a wallet.
At a checkout, the application automatically redeems
offers and records loyalty points for the user. Google
Offers uses geographic targeting to offer coupons. It is
similar to the coupon services offered by Korean social
commerce companies (e.g., Groupon, Ticket Monster,
etc.). The difference is that Google Offers includes the
services provided by Google Maps, Google Checkout,
and Google Places. Using NfC technology, Google
plans to gain advertising revenue (which accounts
for 99% of its total revenue currently) from mobile
businesses.
Apple has information for more than 160 million
credit cards stored on iTunes, which is approximately
IEEE TECHNOLOGY AND SOCIETY MAGAZINE

fALL 2013

equal to the number of subscribers of AT&T and
Verizon combined. Apple, consequently, has more
information than operators do. Taking into account its
business model of sharing revenue from the App Store
(developer 70%, Apple 30%), Apple is likely to create
a business model where it can receive commission for
payments.
We must not ignore Apple's strengths in customer
accessibility, usability, and interactivity. Apple has a
successful ecosystem combing the iPhone, iPad, iPod,
iTunes, and the App store. Apple's involvement in the
rollout of NfC will facilitate NfC transactions and
expand the horizon of the business.
Case 3: ISIS vs. Visa
On November 16th, 2010, top U.S. mobile carriers
Verizon, AT&T, and T-Mobile created an NfC- based
mobile payment venture called "Isis" in an attempt to
overtake Apple and Google. These carriers collaborated with Discover financial Services and Barclays
to launch their own mobile payment system. Michael
Abbott, head of Isis, said that the aim was to create
a mobile wallet that would practically replace cash,
credit/debit cards, reward cards, coupons, tickets, and
bus/subway cards [6], [7]. Recently, however, the three
carriers have been seeking partnership with credit
card firms such as Visa and MasterCard. Visa plans to
establish an NfC payment system in the United States
and Canada. Since the company accounts for more
than half the credit card payments in the United States
and has over 1.8 billion users worldwide, it is likely
to have a significant impact on the market. To build a
mobile wallet system, Visa acquired online payment
service providers such as Cybersource, Authorize.
net, and PlaySpan [8]. furthermore, it is collaborating with Bank of America, Chase, and Wells fargo to
build its NfC mobile payment system.
Case 4: Mobile Network Operators
in South Korea (2008 - )
In Korea, KTf's K-merce (2002), SKT's Moneta Service (2004), and LGT's Bank on Service (2004) were
the first mobile payment services. These services,
however, supported only reader mode, which enabled
wireless payment and mobile banking services, but
did not support P2P mode. The security level was
relatively primitive compared to NfC service today,
and battery management was poor with no batteryoff function. furthermore, the services did not have a
standard interface.
Recently, Korean operators are actively expanding the NfC market. The number of mobile phones
is expected to grow to more than 25 million units by
2013. In addition, infrastructure for mobile payments
will be created through the support of operators, card
firms, and the government. About 50 000 payment
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