Observers keep scrutinizing the Japanese market to discover new mobile user behaviors, and they praise Mobile Felica as THE example to follow for the (future) expansion of NFC (Near-Field Communication). Indeed, figures of the penetration of the Osaifu-Keitai (Felica mobile wallet) are quite impressive with about 25 million phones equipped with the application. More impressive even when you look at the ecosystem that NTT-DoCoMo has been able to bring together around the Osaifu-Keitai. Virtually any corporation with a cash card (Edy, Quicpay, iD), a transportation card (Suica), or a loyalty card (JAL, ANA, etc.) is today using the Felica Networks. Truly a big success, and growing…

So, why this apparently provocative title? It technically works, the 3 MNOs (DoCoMo, Softbank and Au) have agreed to work together on it, users like it, merchants and banks have joined it (310,000 acceptance points!), and the business model seems juicy. Yet this system that Japan has put together is unlikely to create NFC copycats in other countries.

The main reason is that Mobile Felica has very limited functions compared with NFC. Indeed Mobile Felica is only using one communication mode called “card emulation mode” (the mobile phone acts as a contactless card). NFC, on the other hand can work on 3 different modes: “card emulation”, “reader mode” and “Peer-to-Peer mode”. Mobile Felica is nice, but the fact that it can only emulate cards has 2 implications: (1) the back end system is huge, and centralized at Felica Networks; (2) the possibilities for new types of services are very limited.

On the contrary, NFC allows all kinds of new services because the technology allows the user to interact with reality in multiple ways. Tons of games, social network applications, viral marketing campaigns, coupons, lottery, etc. can be imagined thanks to the other 2 modes (reader and Peer-to-Peer). Moreover, all kinds of non-secure applications (as opposed to payment, transportation or loyalty applications that require security) can be developed by anyone. No need to be a payment system or a large organization. And no need to necessarily pay the OTA services of Trusted Service Managers (TSM) to make use of this technology. TSMs will exist of course for secure application, but many other types of downloads will be possible.

NFC, as opposed to Mobile Felica, is a great opportunity to link the Internet to the real world. As a matter of fact, this technology should be considered as an extension of the Internet into reality, made possible thanks to the convergence of Mobile and Internet. Osaifu-Keitai is the first good implementation of mobile wallet, but NFC has the potential to be really much more than that. Observers are right to monitor user acceptance of the mobile wallet, because it will also be the first usage of NFC. But NFC will go much, much further than that.

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