In the beginning, the cell phone was a phone — handy for making calls but little else. Then manufacturers added cameras, e-mail, music, and even television to their phones, making the gadgets an essential part of daily routines.
Now, Japanese carrier NTT DoCoMo Inc. (DCM ) wants to entrench the once-humble cell phone even deeper into consumer lifestyles by turning it into an electronic wallet. After introducing handsets last year that double as debit cards — allowing users to pay for small purchases such as soda or coffee from vending machines and convenience stores — the company this year plans to make those phones full-fledged credit cards.
To boost its effort to make mobiles the new way to pay, DoCoMo is taking a 34% stake in Sumitomo Mitsui Financial Group Inc.’s credit-card business. In late April, DoCoMo said it would pay $935 million for the stake in Japan’s second-largest credit-card issuer. DoCoMo has also held talks with Japan’s No. 1 issuer, JCB International Co., about some sort of tie-up, though no details have been released. “This is a completely new sector for DoCoMo and is part of our aim to move into areas where we are not so dependent on communication usage,” Masao Nakamura, DoCoMo’s chief executive, told reporters on announcing the Sumitomo deal. “Our entry into the credit-card business will be a turning point for us.”
By Ian Rowley