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NFC kiosks in Japan have helped mobile payment adoption

January 12, 2012 by Natsumi Nakamura — Marketing, PFU Systems

I recently read several articles about the slow adoption of mobile and NFC payment in the U.S. including the following - Hold onto your wallets: Mobile payments seeing slow adoption.

In Japan, NFC (more precisely NFC-F which is different from NFC-A and -B used in the U.S.) has been enthusiastically adopted nationwide over the last 10 years. Virtually all commuters in the major metropolitan areas of Japan use NFC to pay their fares. Consumers can make payments using their NFC enabled phones or NFC cards at many locations including convenience stores, newsstands, restaurants, various retailers and vending machines. Almost 60 percent of cell phones – more than 70 million units in the market including recent Android smartphones - are NFC-enabled.

While functionalities of NFC are not limited to payment, NFC point-of-sale (POS) devices usually handle merchant transactions only by reading the balance, deducting the price of items purchased, and then writing the new balance onto the NFC chip. The demand for kiosks that can offer more NFC capabilities is high. In the last couple of years, we have deployed more than 10,000 kiosks equipped with NFC readers or writers in many different applications throughout Japan.

The following are examples of the capabilities NFC-enabled kiosks can provide:

e-Money Replenishment

• In Japan, there are six major prepaid e-Money currencies used nationwide and in the greater metropolitan areas.
• NFC Kiosks allow consumers to add money values to their cards with cash or credit cards.
• The kiosk accepts the payment and writes the new balance to the NFC chip in the cards or cell phones.

Royalty point management

• A number of retailers and restaurants use NFC for their royalty programs. For example, All Nippon Airways (ANA) mileage points can be exchanged to Edy – the most-used prepaid rechargeable contactless smart card or e-Money.
• Kiosks allow users to manage their royalty points; they can check the current point balance and exchange them into e-Money.
• Kiosks communicate with servers to retrieve the point information, handle the exchange transactions and write the new value to NFC chips.

Visitor points

• Some retailers encourage customers to visit their stores by offering customer reward points even without any purchases.

• Customers can simply walk in the store and use a kiosk to receive points.

Airport Check-inT

• The two major Japanese Airlines – ANA and Japan AirLines (JAL) use NFC for their mileage membership cards. Flyers can use kiosks in the airports or hotels to check-in with their cell phones or membership NFC cards.
• After checking in, they can use the same cell phones or cards to go through custom and boarding gates, which makes the entire process efficient and paperless.

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