Mobile Phone Payment System in Japan

I was reading an article today on The Economist about how the banking industry is headed for a shake-up, as more and more people access the internet from their phones. The passage below caught my attention (emphasis added):

The revolution will be most visible on the high street. Branches will become less important and there will be far fewer of them. Those that remain will look quite different. Instead of walking into one to deposit cheques or get statements, most people will do this on the fly from their mobile phones. Instead of opening wallets in shops and being confronted with a choice of whether to pay by cash or plastic card, they will wave a phone at the checkout. On it will be a virtual wallet provided by a firm such as Google, PayPal, Square or some company that hasn’t been thought of yet.

SIR, I present to you the mobile phone payment system in Japan. The 'future' has been here for quite some time. As you'll see in the YouTube video below (which itself is a couple of years old now), you can use your phone to pay for stuff exactly as described above, and just about anywhere: convenience stores, restaurants, vending machines, taxi cabs, buses and subways, you name it.

These phones run on a system made by Sony called FeliCa, short for Felicity Card, which links up different service providers to your phone's account. These phones are called osaifu-keitai or wallet mobile, first introduced by NTT Docomo but now supported by most mobile phone operators in the country. And they're quite ubiquitous, especially in Tokyo.

So your phone basically acts like a charge card, and money gets deducted every time you wave it at a checkout counter. If you're running low and need to recharge, you can either do it through a linked bank account or via credit card, all directly from your phone. The system works remarkably well and compared to the rest of the world is way ahead of its time.

The challenge for Sony will be to figure out how to export this technology elsewhere. For a company that has lost money four straight years, who knows, this might be their ticket back to the show. Although, it seems in the US Google's already leading the way with Google Wallet, which at the moment is only available through Sprint but I'm sure other providers aren't far behind.