A couple of weeks ago I wrote about the iPhone, and how I was not so impressed by all the functionality there, because I have seen what the keitai (mobile phones) in Japan can do. Well, I missed a big fat chunk of it– the keitai are capable of a lot more than what I had considered at the time, and things are about to get very interesting over in Tokyo.
Son Masayoshi, the maverick entreprenuer behind Yahoo BB (Japan Yahoo as an ASDL provider) and some other wacky schemes, recently flooded the market with cheap cell phones with a prepaid-package of minutes every month. When I say cheap– I mean $10/month– that’s it (the phone is free). My 68-year-old father-in-law recently got one, as did his wife (these two have resisted cell phones for 15 years, if that gives you any idea of their technological inklings). The deal from Son Masayoshi was finally too good to resist, and they’ve joined the masses.
So what? Well, The Economist just came out with a rather good piece about the death of cash society, and how everyone is going to be moving toward Near Field Communication (NFD). Japan has been pioneering this with the Suica cards in the trains, and then the shops around the train station– wave your metal card (or now your keitai) near the register and tada! everything is paid for. Here’s the trick: people will have their salaries deposited to their bank accounts as normal, but now they wil lgo one step further and transfer all their “walking around money” from the bank account to their keitai, maybe 20% of their salary. Son must have understood that by putting phones in everyone’s hands, he doesn’t need to make a damn dime on the airtime, he has a chance to capture 20% of the cash holdings of the entire country.
Not bad– he hands out cell phones and creates maybe the 5th or 6th largest “bank” in Japan. But it gets even better: cash is untraceable (that’s why they call it “cash”); but all these keitai transactions are traceable at the atomic level. The data around buying trends alone is worth millions (for both internal investment data as well as for sale back to merchants).
Let’s see if Son Masayoshi can pull off what may be the biggest game changer since Visa created the debit card. I would welcome any comments from those who have used smart cards– are they easier than cash? Do you worry about the (lack of) privacy)?
