More and more retailers are providing consumers with the option of using electronic money, essentially in the form of prepaid cards, instead of cash when purchasing goods.
The nationwide leader in the growing field is the Edy service, which is offered by Tokyo-based BitWallet Inc.
“Edy is not a real currency that the central government has authorized, so we offer it in line with a law covering prepaid cards,” said Makoto Yamada, deputy general manager of business planning at BitWallet, which was established by Sony Corp. and other large firms to expand the use of electronic money — a concept originally designed for settling online transactions between businesses.
Although not real cash, more and more people are using the Edy service because major companies have issued integrated circuit cards to this end. Users pay cash for the cards, which are offered at various retailers, and are awarded points based on the amount paid.
If a card runs low on points, a cash injection will bring the level back up, and no fee is charged to users.
Nationwide there are now 2 million Edy-capable cards in circulation, compared with 500,000 as of last September.
All Nippon Airways, for example, started issuing Edy-capable ANA cards last June. Holders can purchase goods with the electronic money at more than 2,400 stores nationwide. Card users can also receive ANA mileage points based on the amount purchased via the Edy service.
“It’s the world’s first service linking airline mileage with electronic money,” Yamada said.
The nationwide convenience store chain am/pm Japan also allows card holders to buy goods with Edy cards. Customers merely hold their cards up to infrared readers that check their Edy-point data at the time of purchase.
Yamada believes the Edy service could replace the need to carry small change.
“We stared the business by paying attention to the needs of people. Everybody wants to reduce the waiting time at the cash register,” he said, noting Edy card users can use scanners at stores to make purchases unassisted.
The am/pm chain and other stores offering the Edy service are also allowing customers to charge their purchases. On Aug. 19, nine am/pm stores debuted automatic machines for charging via the electronic money.
Also in August, Japan Post allowed Sony Finance International to issue postal savings cards that use the Edy service. The firm plans to issue 100,000 such cards in the first year.
Other major retailers, including the Lawson and Sunkus convenience store chains and McDonald’s hamburger outlets, have launched Edy test services.
“More and more people have become familiar with the Edy service, so it is getting easier for us to attract companies that can issue cards for its use,” Yamada said.
Sony Corp. debuted the Edy service on a trial basis in 1999 at the Gatecity Osaki building at Shinagawa, Tokyo, in order to accumulate data on its operation, he said.
After the experiment succeeded, Sony, Sony Finance International, NTT DoCoMo Inc., Bank of Tokyo Mitsubishi and Toyota Motor Corp established BitWallet in 2001 to expand their electronic money business.
BitWallet business planning executive Takashi Nakamura recalled key advances for the firm, including landing the contracts with am/pm Japan last summer and with ANA. He also said the firm has concluded contracts with companies located in major development projects, including Shinagawa Intercity and Roppongi Hills, in Tokyo.
The Edy service is poised for further expansion nationwide, Yamada stressed. “We hope to get more than 8,000 stores on board and see 5 million IC cards capable of using Edy across the nation by the end of March 2004.”
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