Contactless Payment Markets in Japan and South Korea

Secure Payment Chips, Cards, Mobile Devices, and Readers

Vendors and consumers in Japan and South Korea lead the world in adopting contactless payment solutions. Both countries have implemented nationwide services on a commercial scale. In Japan, FeliCa has created innovative businesses such as Suica and Edy through which credit card and financial service, transportation and mobile service companies have aggressively adopted FeliCa-based mobile phone and smartcard payment solutions. With the contactless transit card called T-money, South Korean card issuers designed a contactless payment system that includes USIM mobile payment solutions. Visa Wave and MasterCard PayPass began implementing contactless payment services in the South Korean retail sector early in 2006.

This study assesses the Japanese and South Korean contactless payment market landscapes. It examines business models, tracks merchant uptakes, and gauges card issuers’ and consumers’ expectations in both markets. The report includes forecasts of shipments and revenues for chip, reader, and contactless payment solution-enabled devices to 2012.

What Questions Does This Report Answer?

  • What market trends drive FeliCa adoption across Japanese contactless payment markets?
  • What do FeliCa-based services (including Suica and Edy) do, and how do they impact Japanese consumers?
  • What does Osaifu-Keitai do and how does it impact Japanese consumers?
  • What do contactless payment-based credit card services including iD, QuicPay, and SmartPlus do, and how do they impact existing credit card services?
  • What are the business drivers for adopting Suica and Edy services?
  • What merchants and companies are adopting FeliCa based services?
  • What examples of FeliCa based services exist, and how successful have they been?
  • What does USIM (Universal Subscriber Identity Module) do, and what impact does it have on Korean mobile payment solution services?
  • Why are Korean mobile operators and vendors aggressively pursuing network-linked RFID (Mobile RFID) and what are their business models?
  • How will Visa Wave and PayPass impact Korean contactless payment services?
  • How do Japanese and South Korean consumers feel about contactless payment services, and what are the advantages for merchants and operators?
  • What business models will be found in these markets?
  • What do Japanese and South Korean mobile operators, card issuers, consumers and merchants expect from contactless payment?
  • By 2012, how large will shipments, ASP and revenue be for readers, chips and enabled devices?
  • What will chip and reader shipments and revenue be by 2012?

Who Needs This Report?

  • Integrated circuit manufacturers
  • Contactless and smart card manufacturers
  • Reader and point of sale (POS) terminal manufacturers
  • Credit card associations, issuing banks, acquiring banks
  • Mobile operators
  • Cash-payment focused merchants
  • Contactless hardware, software and integration vendors
  • Micropayment companies
  • Investment banks and venture capital firms
  • Policy regulators