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In Japan, where NTT DoCoMo has been piloting RFID services in mobile handsets
with the Suica system, consumer response has been lukewarm. Only 2% of East
Japan Railway passengers had used Suica cards as of September 2004. While these
are very initial results and public education needs to be increased, the
response rate has been lower than expected.
The potential of RFID enabled handsets is unlikely to be realized until several key issues are addressed:
Security and phone-renewal
The RFID chip is not part of the SIM card and as the phone reaches the end of its life-span, this presents some issues regarding security and transferability of the data.
Managing the transactions
Most operators do not have the resources or know-how to manage transactions. A third party is needed.
Deployment alongside existing RFID networks
Establishing services such as public transport payment and small purchases will require the cooperation of clearing houses, banks and merchants.
Deployment in locations without existing RFID networks
In the future all handsets are likely to have Near Field Communications (NFC) capabilities. But who will deploy the network of readers and manage transactions in cities without existing RFID networks? Mobile operators are unlikely to have the necessary resources, and RFID readers are costly.
Competition from credit cards and incumbent systems (eg.
public transport) which may attempt to block new players
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