--- begin forwarded text
Date: Mon, 12 Dec 2005 19:10:44 -0500
To: Philodox Clips List [EMAIL PROTECTED]
From: R. A. Hettinga [EMAIL PROTECTED]
Subject: Japan Puts Its Money on E-Cash
No, not *that* E-Cash(tm), but you get the idea...
The Washington Post
Japan Puts Its Money on E-Cash
While Saving Time, Consumers May Spend More
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
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
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
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