Got A Cell Phone? I'll E-Mail You Money

My BusinessWeek colleague, Amy Feldman, wrote in this week’s issue about a service that will soon be available in the U.S.: emailing money to friends and family.

In Japan, the service has been around since mid-2008. The first was launched by KDDI, the telco that runs au and Japan’s second-biggest mobile operator. Its Jibun Ginko (My Bank) service, which started in July 2008, requires that mobile phone subscribers open an account and deposit money, as they would at an ordinary bank.

How common is it to email money from phones? KDDI says 750,000 people have opened accounts so far. But only about 10% are regular users, so it’s mostly early adopters who are taking advantage of the service.

Actually, no money is sent from phone to phone. The email message is just a proxy for the transaction, which takes place between banks over a secure network.

The money transfer service is free when it’s between Jibun Ginko account holders. There’s also no charge if money is sent to a Mitsubishi UFJ Bank account. For all others, it’s 170 yen ($1.90) if the amount is less than 30,000 yen ($330)—about what you would pay for pulling out cash from a convenience store ATM in Japan—or 270 yen ($3) if the amount is 30,000 yen or more.

How much can you send using your cell phone? 10 million yen, or about $110,000. That’s because KDDI’s Jibun Ginko operates as a bank, so the usual money transfer limits apply.

Back in July, NTT DoCoMo, the country's biggest wireless carrier, introduced its own service, called DoCoMo Keitai Sokin (DoCoMo Cell Phone Money Transfers). But unlike KDDI’s service, DoCoMo relies on Mizuho Bank to process the transactions. DoCoMo says the service was conceived as a “fast and easy way to take care of money matters with friends and acquaintances”--when splitting the bill after a dinner with colleagues or family, for instance.

Which explains why DoCoMo limits how much users can send to another DoCoMo user’s cell phone number: 20,000 yen ($220).

Both parties have to be DoCoMo subscribers. But there’s no need to register or open a bank account with DoCoMo. And since DoCoMo (which is teaming up with Mizuho Bank) acts as the go-between, there’s no need to exchange bank account information--bank branch, account number, name--which is what you would need if you were wiring money from one bank to another. The recipient gets an email on his phone and has the option of depositing the money in a Japanese bank account or having the money credited to his monthly phone bill. The most anyone can receive is 200,000 yen ($2,200) per month. DoCoMo charges the sender 105 yen ($1.16) and the recipient 65 yen ($0.72). The charge is waived for the recipient if he deposits the money into a Mizuho Bank account or credits it to his monthly phone bill.

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