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1 post • Page 1 of 1
July 23, 2010, 7:58 AM JST
E-money - Big, and Getting Bigger in Japan
Though Japan is known as one of the most technologically advanced countries in the world, itâ€™s curiously still a cash-based society. The one exception is electronic money, which is stored in a tiny chip in a special card or oneâ€™s cell phone.
The logo of Seven & I Holdings Co. is displayed at a Seven-Eleven convenience store in Tokyo. The company introduced the Nanaco card in 2007. The concept is pretty cool: one can make purchases by simply swiping their cell phone on an electronic reader. And itâ€™s growing in popularity too. During the first half of 2010, the number of electronic money transactions swelled by 39% compared with the same period a year ago, according to the Nikkei newspaper.
Electronic money became popular around 2007, when two major retailers, Aeon Co., Ltd. and Seven & i Holdings Co., Ltd., started their own versions of electronic money. The transactions by Aeon and Seven & I account for roughly 50% of all transactions in Japan.
Retailers have promoted the use of their money by giving points to shoppers. For example, users of the Nanaco card, offered by Seven & i, earn 1 point for every 100 yen of shopping, which can later be used to pay at a rate of 1 yen per point.
â€œConvenience increased because stores (in which electronic money can be used) expanded, and the usage of electronic money has started to become established,â€� said Yukinobu Kitamura, a professor of economics at Hitotsubashi University.
Aeon is the operator of several retailers, including a convenience store chain, while Seven & i operates the Seven Eleven stores and retailing stores such as Dennyâ€™s Japan.
However, experts think the popularity of electronic money will not change how people pay for more expensive goods. The current outstanding amount of electronic money in Japan is only about 0.11% of Japanese currency, according to a 2009 Bank of Japan report.
According to a 2009 survey by the Central Council for Financial Services Information, 25.2% of singles said that they would use electronic money to pay for shopping goods cheaper than 1000 yen, while only 12.4% responded credit cards. In contrast, only 2.7% said they would use electronic money for payments greater than 50,000 yen, and 68.5% said credit cards.
Read this post in Japanese/日本語訳はこちら≫