SK Telecom-KDDI-SOFTBANK MOBILE Agree to cooperate on Mobile NFC Service
SK Telecom-KDDI-SOFTBANK MOBILE Agree to cooperate on Mobile NFC Service
  • Korea IT Times
  • 승인 2010.07.15 10:06
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Seoul, Korea, 15 July 2010 - SK Telecom (NYSE: SKM) announced today that it signed a Memorandum of Understanding (MOU) on a Korea-Japan mobile payment cooperation with flagship mobile operators of Japan, KDDI Corporation (KDDI) and SOFTBANK MOBILE Corp. (SOFTBANK MOBILE).

This business cooperation among the three companies is expected to lay ground for an interoperable and contactless payment environment for mobile phone users of Korea and Japan. Customers will be able to enjoy easy and convenient payment and additional services such as coupon benefits seamlessly without the need of renting and changing phones when visiting each other's country.

The MOU carries significance as, besides the contactless payment solutions currently in use in the two countries - Combi Card, a financial-services enabled USIM in Korea and FeliCa in Japan, the signing companies confirmed their intent to cooperate on developing a new type of integrated mobile card and coupon solution based on Near Field Communication (NFC) technologies to allow interoperability in both countries.

NFC was chosen as the USIM card's interface technology for mobile payment in 2007 by 3rd Generation Partnership Project (3GPP), collaboration between groups of telecommunications associations for making a globally applicable 3G mobile phone system specification, and European Telecommunications Standards Institute (ETSI), the worldwide standardization organizations in the telecommunications industry.

The signing companies plan to offer a new mobile NFC solution operable on handsets embedded with an NFC card with RFID function. The standardization of NFC card was completed in 2008 and commercial launch of NFC-compatible handsets is expected late this year. NFC-based transactions require NFC readers, but in Korea, NFC phones will be compatible with existing USIM card readers, which already amount to around 25 thousand. In the case of Japan, however, the number of NFC readers is just around a few hundred so additional installations will be necessary.

When the NFC- based payment system roll-out is completed, NFC phone users in Korea and Japan will be able to make mobile transactions after a simple downloading of a mobile payment application to their phones. Plus, various services - mobile coupons, membership discounts and mobile gift vouchers- already in use in Korean and Japanese markets will also be available via NFC handsets. Customers will be able to seamlessly use the convenient payment service as well as additional mobile services without any service interruptions or geographical limitations.

Such an endeavor among the mobile companies in Korea and Japan started from the consensus on the need for a mutually compatible mobile payment market.

So far in Korea, a financial USIM called Combi Card is the most widely used mobile payment solution in various contexts: as credit card, transit card, membership card with coupon benefits.

The Combi Card enables users to make financial transactions via their cell phones. Just by simply inserting the financial USIM card to 3G handsets equipped with RFID function, users can experience an integrated mobile card solution. This system has widely penetrated into the mobile payment market in Korea with the high adoption rate of 3G handsets since 2007. This financial USIM offers an integrated smartcard solution that includes banking, transit, stock transaction and credit card service. As of late May, 3.28 million SK Telecom customers are using handsets equipped with the financial USIM.

In the case of Japan, mobile operators have aggressively adopted FeliCa-based smartcard payment solution that covers credit card transactions, coupon and membership discount and transportation payment services. Mobile FeliCa is a contactless RFID smart card system developed by Sony and primarily used in electronic money cards. In Japan, finance-enabled handsets come with a pre-embedded FeliCa card so that users can experience the convenient mobile payment system without additional card installation.

Starting with NTT DoCoMo in July 2004, KDDI and SOFTBANK MOBILE have also been offering FeliCa-based mobile payment and coupon service.

Currently Korea and Japan are highly recognized as countries leading the world in mobile payments and related infrastructures. However with the MOU, SK Telecom and its partner companies plan to lay the foundation to solidify the leadership in global mobile payments business.

Hong Sung Chul, Executive Vice President and Head of Service Division of SK Telecom said, "It is encouraging that mobile carriers of Korea and Japan have joined hands to promote mobile payment business. We hope this cooperation can become a strong springboard for boosting the overseas growth of SK Telecom's comprehensive mobile payment service, T smart Pay, starting with the Japan market."



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