DoCoMo to buy into credit card company?

From mobile handset to mobile wallet

While most mobile companies are looking to turn their phones into music players or cameras, Japanese mobile giant DoCoMo is putting money behind the trend for turning handsets into wallets.

According to reports, DoCoMo is planning to buy up a 33.4 per cent stake in the credit card company Sumitomo Mitsui, with a view to bolstering the use of mobiles for making micro-payments.

A statement from Sumitomo says: "It is true that [Sumitomo Matsui] has considered various initiatives to develop a new business model using mobile telephones, however, nothing concrete has been decided at the moment."

DoCoMo has already has a wallet phone in its portfolio, which it launched last year. The operator has so far shifted over one million phones equipped with Sony's FeliCa chip, which enables users to make small payments by swiping the phone over a reader.

A DoCoMo spokesman said: "DoCoMo is positioning its mobile phones as indispensable tools for everyday life and continues to consider options for developing new business models pursuant to this concept. DoCoMo has not made any announcement regarding a strategic investment in a credit card company, however, nor has it made a concrete decision at this time."

Neale Anderson, analyst at research firm Ovum, believes such tie-ups could be a long-term winner for mobile operators.

"With newer FeliCa phones carrying user cash accounts and capable of fingerprint ID recognition, DoCoMo is already some way towards offering basic financial services. DoCoMo's wealth of customer information would also be attractive to a financial services partner. Unlike many Western markets, the majority of DoCoMo's 48 million strong customer base are contract users, with their details on file," he wrote in a research note.