|
E-cash
is credited with helping Japan’s economic recovery. Note sociocultural factors
that may not globalize well. kwc Japan Puts Its Money on E-Cash By Anthony Faiola,
Washington Post Foreign Service, Monday, December 12, 2005; A01 TOKYO -- Toru
Nashimoto, a trim 36-year-old with nary a coin in the pockets of his slick
pinstripe suit, confidently strode toward the cashier at a bustling sushi bar
to settle his $45 lunch tab. He whipped out a thin electronic card and placed
it above a scanner that quickly blinked neon blue before emitting a
computerized ka-ching. It was the telltale
sound of Japan's new electronic money. In seconds, Nashimoto had paid for his
meal of sea urchin, eel and raw fish and was hustling back to work. No change
from the cash register, no waiting for confirmation, no pin code to enter.
"Who needs to carry real money?" said the commercial real estate
manager. "I often don't even carry a wallet with me anymore." Nashimoto is part of
the latest trend in Japan, where society is rethinking commerce by doing away
with the increasingly arcane concept of cash. Technology analysts say the use of electronic money amounts
to a leap forward in commerce and shopping. Using cell phones that transmit
infrared signals -- or, as in Nashimoto's case, a smart card that doubles as a
set of electronic keys and lets him earn airline miles with each use --
Japanese consumers are whisking through checkout lines, buying everything from
sushi to furniture without ever yanking out their wallets. Users can add value to
their cards or cell phones at thousands of automated docking stations around
the country, where they insert paper money and get credit for e-cash. They can
also use credit cards to replenish e-cash on the Internet. Electronic money
emerged four years ago as a convenient tool for fast-paced train commuters. The Japan Research Institute, an
economic research group, estimates that at least 15 million people here are now
using e-cash, a figure projected to reach 40 million -- about one in every
three Japanese -- by 2008. The number of e-cash transactions reached 15.8
million per month in 2005, more than double last year's figure, according to
Japan's two largest electronic money providers. E-cash is being
accepted at convenience stores, department stores, cafes, restaurants,
newsstands and electronics retailers -- enabling users to go shopping carrying
nothing but their cell phones. At some supermarkets, up to 40 percent of all
purchases are made with electronic money. Vending machines that
dispense sodas and snacks with a flash of a cell phone are popping up on street
corners and inside office buildings across Japan. Tokyo's subway system -- the
world's second busiest after Moscow's -- will begin accepting electronic money
next year. Experts cite the rise of e-cash as a reason for a drop last July in
the circulation of yen coins, the first decline since 1971. "Japan is moving
toward the cashless society," said Makoto Yamada, an executive at bitWallet Inc., operator of Japan's largest virtual money
service and a partnership jointly owned by the Sony Group, the Toyota Group, All Nippon
Airways,
two large Japanese
banks and NTT DoCoMo,
Japan's largest cell phone operator. "Electronic money is taking us
there." The smart cards and
phones used are embedded with antennas and integrated circuit chips that allow
the devices to receive and emit electronic signals. When the devices are placed
near a scanner at a checkout, for instance, a signal is emitted and e-money is
deducted. Similar electronic
money concepts are being tried in North America and Europe. Analysts say the
Japanese version requires some fine-tuning before it can be exported. Many note that the
idea works well here partly because concerns about safety and security are
quite low -- in Japan, even lost wallets are often returned to their owners
intact. So the loss of a card or a cell phone loaded with hundreds of dollars
of e-cash represents a comparatively small risk. Electronic money also
banks on consumers who are willing to pay for their purchases in advance, the
opposite philosophy of a credit card. That works well in debt-averse Japan,
where only 9 percent of consumer transactions are settled by credit card. But
would it work in a place like the United States, where 24 percent of
transactions are made on credit? Some Americans,
analysts note, are already using a version of e-cash to bypass toll lanes on
highways. "In the U.S., use of credit cards and debit cards is already
very well developed, so it's unclear how electronic money will take off
there," said Shigeru Takamura, senior consultant at the Japan Research
Institute, which is affiliated with the Tokyo-based Mitsui Sumitomo Financial
Group. "Look for it in places where saving time matters, like parking
garages and grocery stores." In Japan, electronic
money is becoming part of the fabric of everyday life -- particularly for young
professionals. One explanation is
that using cash in Japan can be cumbersome. The lowest denomination of paper
currency is the 1,000
yen note -- worth about $8.30. That means people lug around six different
values of yen coins to make small purchases. The e-cash service
exploded after DoCoMo added electronic money transmitters to its
latest-generation cell phone last year, creating what has been dubbed a mobile
wallet. "If I need to buy
something quickly, I just grab my cell phone and run out the door," said
Mihoko Iguchi, 43, a dress shop owner who was using a bright orange cell phone
to buy a fashion magazine at a convenience store. "I don't have to sift
around for coins and I can buy all sorts of different things." Most electronic money
purchases are for less than $10, according to statistics. That amount is expected to
increase, particularly after DoCoMo begins extending credits on phones and
smart cards next month, doing away with the need to constantly replenish
e-cash. Electronic money is
helping urban dwellers save on another precious commodity -- time. One study by
the Japanese convenience store chain AM/PM indicated that shoppers using e-cash
completed their purchases 10 percent faster than those using real cash. The
time savings was greater when customers were buying more than one item, and
greater yet when compared with those paying by credit card. "During the
lunchtime rush, we often have long lineups of 10 people or more," said
Yoshihisa Okuma, AM/PM's head of strategic planning. "But we've been able
to significantly reduce waiting times by using electronic money." After almost a decade
of deflation in the world's second-largest economy, electronic money is also
credited with playing at least some role in the economic recovery here.
Thousands of businesses are purchasing the new hardware required to accept
e-cash. More important, the system is subtly designed to encourage Japanese
consumers to buy more. E-cash shoppers at
AM/PM stores, for instance, are laying out about 15 percent more per
transaction than those paying with real cash. Shoppers view electronic money as money already
spent, making it psychologically easier to buy extra items. Businesses are also offering incentives
to spend e-cash, including a proliferation of programs that offer discounts or bonus points toward the cost of airline tickets, free
DVD rentals and other merchandise. Nashimoto, for
instance, earns one mile on All Nippon Airways for each $1.66 worth of virtual
money he spends. He also receives double points when he uses his traditional
ANA credit card to recharge his electronic money card on the Internet. "Maybe I do spend
a bit more with electronic money," he said. But since he began using the
system three years ago, he has earned about 10,000 airline miles using the
system. "So it still seems smart to me -- and kind of cool." Special
correspondent Sachiko Sakamaki contributed to this report. http://www.washingtonpost.com/wp-dyn/content/article/2005/12/11/AR2005121101097.html |
_______________________________________________ Futurework mailing list [email protected] http://fes.uwaterloo.ca/mailman/listinfo/futurework
