The mobile phone may become a second wallet

After debit card payment appeared in Hungary numerous financial experts were of the opinion that the new payment method would spread fast – since it was secure, simple and the transaction was instant (unlike in many other countries). Nevertheless, Hungarians were slow to catch up with the new trend: in September 2009, there were nearly 9 million debit cards issued, but the proportion of regular debit cards users was still low. 63 percent of Hungarians above the age of 18 have a debit card, but 17 percent never use them and 23 percent pay with them rarely. Since 81-82 percent of people have mobile phones (which technically can be used to effect payments), there is a breakthrough opportunity to replace minor – few thousand Forint – cash payments. 60 percent of Hungarians have already heard about the Mobile Shopping service (60 percent mentioned motorway stickers and 48 percent knew about parking fees). Mobile Shopping works without preliminary registration and there is no need to sign a contract; consumers can purchase goods or services via SMS, calls or WAP. Mobile Payment requires a bank account contract with a bank: clients debit their account using their mobile phones (via the Internet or in person at Mobile Payment points-of-sale). The European Commission published its Payment Services Directive (PSD) on 13 November 2007 and its objective is to do away with the obstacles that hinder new financial service providers’ entering the market. The EU expects stronger competition and an increase in the popularity of electronic payment methods. For instance, in Japan the proportion of mobile phone owner was 87 percent in September 2009, which is about the same ratio as in Hungary, but the first mobile payment solutions already appeared 10 years ago. They developed a system that unites several payment functions; for this, they needed Sony’s RFID-chip that they started to build into mobile phones from 2004. The first such mobiles were named ‘Osaifu-Keitai’ (mobile wallet), that is actually a brand name of the company NTT DoCoMo that was the first to develop the system. The chip can read information from a few centimetres, so there is no need to take the mobile out of the bag – it is enough to turn it towards the reader. The chip contains the EDY (Euro-Dollar-Yen) prepaid electronic payment solution. EDY has developed into the most widely used mobile wallet solution in Japan, thanks to its practicality. In a few European cities, pilot mobile payment systems were launched, but the most progressive development takes place in Finland. In the town of Oulu, a mobile payment project called ‘SmartTouch’ program started in 2008. Local companies cooperated with the municipality in making mobile payment possible at schools, old age homes, in public transport services, sports facilities and shops. In Hungary, there is no such complex system yet, but in a few years time it may appear here as well.