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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (49237)	12/17/2005 8:18:10 PM
From: slacker711	Read Replies (2) \| Respond to of 197246

++ Viewpoint: Virtual Wallet Services The end of the cash era? japaninc.com Despite the efforts of credit card companies, the majority of payments in Japan are still made in cash. Japanese love cash. Major players like Sony, Japan Railways East (JR East), the am/pm convenience store chain, and mobile carriers have launched a huge initiative to push virtual wallets on mobile phones. Can the combination of mobile and smart card technology change the way Japanese make payments? Sony developed the underlying technology. Called Felica, the technology allows the embedding of an IC chip and internal antenna in a card. (The word "Felica" is a combination of "felicity" and "card," suggesting an easier and more convenient life.) Contactless communication is activated by weak electronic signals from an external reader-writer device. The handset or smart card receives these signals. Communication is even possible when the handset is switched off. With a single card, multiple data sets for different purposes can be managed. The operating system embedded in Felica has a file system that securely separates data by application. A company can use Sony's software development kit to create its own Felica applications. A major platform making use of Felica is Suica, the IC card ticketing system introduced by JR East in 2001. Suica cards can be purchased at stations and re-charged up to a balance of 20,000 yen at vending machines. JR East has equipped all its ticketing gates with reader-writers. Sony strove to make Felica fast and secure; speed and security are vital requirements of a virtual wallet. ("Suica," in fact, is a portmanteau of the mimetic word "sui-sui" ["quick"] and "ca," short for "card".) JR East's busiest stations in Tokyo must be able to handle thousands of secure debit card transactions per minute. When passengers pass through the ticket gate, they hold the Suica card against the Felica reader-writer device. During this touch-and-go, card and reader authenticate each other, followed by a data read-write for the contactless payment. These three steps, including secure encryption, must be completed within one tenth of a second. Dynamic generation of the encryption key with each instance of mutual authentication of reader and card minimizes risk of fraud. Suica has met with an enthusiastic reception, with more than 12 million Suica cards issued to date. The card can also be used to pay at station shops and restaurants. Felica technology is widely used in Japan. Convenience store chain 'am/pm' adopted the 'Edy' electronic money service system in July 2002. The Felica IC chip with antenna is embedded in the Edy debit card. This debit card system is operated by Japanese company BitWallet, whose major shareholders are NTT DoCoMo, Sony, several large banks and Toyota. After purchasing the Edy card, the user can add value to it by using an Edy reader-writer device or online via an Edy account that balances a registered credit card. The maximum value that can be added for one charge is 25,000 yen, and the total debit on the card cannot exceed 50,000 yen. At the cashier the customer pays with Edy by placing the card on the reader-writer. The money is transmitted from the Edy card into the merchant's system and then directly into the merchant's bank account. Edy is complementary to credit cards, as the typical amounts paid are less than 1,000 yen. Major Japanese credit issuers have even embedded Edy into their cards to allow for these types of mini-payments. (The next edition of "Wireless Watch" describes NTT DoCoMo and Sony's effort to create a mobile Felica-based wallet.)