In the grand scheme of mobile payment readiness and adoption globally, Japan has always been at or near the top of industry measuring sticks. Now one of Japan’s mobile communication giants is partnering with MasterCard Inc. to expand contactless payments worldwide starting in 2013.

NTT Docomo customers using iD mobile credit payments, a domestic payment network, with Docomo Near Field Communication-enabled smartphones will be able to make contactless payments outside of Japan anywhere MasterCard PayPass is accepted, MasterCard announced Oct. 11.

The partnership potentially gives contactless payments a worldwide boost, as well as increasing the number of NFC or radio frequency identification-enabled terminals.

In addition, it marks the first time a domestic e-money system in Japan connects with an international payment network to provide greater payment options to consumers, Philip Yen, MasterCard’s group head for emerging payments in Asia Pacific, Middle East and Africa, stated in an e-mail.

MasterCard says the ability for Japanese visitors to use PayPass in the U.S. and other countries also allows Japan to move into the forefront of a global payments system undertaking ongoing preparations for mobile and contactless payments.

Docomo launched its iD-branded mobile credit payments in 2005 and has 17 million consumers using the system, mostly with smartphones that include mobile wallet functions.

Two Docomo handsets will offer the PayPass function for consumers to use the tap-and-go technology, increasing to 70 the number of phone models approved by MasterCard for PayPass.

The MasterCard deal in Japan represents “an interesting development” in the payments industry because it could expose more U.S. citizens to contactless payment when seeing Japanese tourists using the technology, says Scott Strumello of New York- and London-based Auriemma Consulting Group.

“I would take a wait-and-see approach on how it would influence consumers in the U.S., but this could portend what would happen in the U.S. down the road,” Strumello says.

Because Japan was an early adopter in EMV smartcard deployment, the country’s infrastructure is likely in place for contactless payments, setting the stage for even more widespread adoption of mobile payments in that market, Strumello adds.

Japan is part of an Asia/Pacific region in which banks have issued 233 million EMV cards and terminal makers installed 3.5 million EMV terminals through 2011, according to statistics from First Data Corp.

PayPass leverages EMV, but the MasterCard deal with Docomo is not directly related to the EMV migration in Japan, which has not been completed, Yen says. More importantly, Docomo is “taking advantage of the strong growth of PayPass and NFC terminals worldwide,” Yen adds.

MasterCard takes into account the progress of contactless payments in other parts of the world in assessing the potential for Japanese consumers.

“Fifty percent of MasterCard transactions at McDonald’s in Australia are PayPass transactions,” Yen says.

And it appears the numbers will keep adding up for MasterCard’s contactless payment system.

“This is a really good thing for MasterCard because signing an agreement with Docomo would be like signing one with AT&T or Verizon in the U.S.,” Strumello says. “It gives MasterCard access to millions of phone customers in the Japanese market.”

MasterCard says its PayPass network has grown to nearly 500,000 merchant locations in 41 countries.

Most recently, MasterCard partnered with UK telco Everything Everywhere in August to develop mobile and digital payments for the telco’s 27 million UK customers. 

The card brand completed a similar deal a month earlier with Deutsche Telekom to develop mobile payments for Telekom’s 93 million mobile customers across Europe. 

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