South Korean telecom giant KT Corp. said Tuesday it has signed an agreement with Japan’s NTT DoCoMo Inc. to step up cooperation on mobile payments through near field communication technology.

Under the memorandum of understanding signed on Monday, the two companies will ramp up joint efforts to provide NFC-based financial services and customer benefits to subscribers in South Korea and Japan, KT said in a press release.

NFC technology, which allows wireless data exchanges between two devices within a short distance, is forecast to become a major method for financial transactions.

As part of the agreement, KT and NTT DoCoMo also agreed to provide a pre-paid mobile card service to smartphone subscribers of the Japanese mobile operator. The service is set to start in the third quarter of 2013.

The two telecom giants have been moving to boost cooperation since 2005 when they set up the Business & Technology Cooperation Committee. (Yonhap News)