Shut Up & Take My E-Money!

It’s late at night, and you’re on the way home from a night out at the izakaya. You decide it’s best to flood your body with as much water as possible to try and stave off the impeding hangover that will surely come from the night’s festivites. You pick up a 93円 liter bottle water and head over to the register. The clerk rings you up with the same polite smile as always while you dig into your pockets and realize you have exactly 24 yen and nothing else. Smugly, you pull out your transit pass and tap on the side of the register, and walk away. Achievement Unlocked: Japanese E-Money Newbie!

While folks on the other side of the planet are going bonkers over being able to pay for stuff by tapping their cards or phones on things, we here in Nippon have been doing it like this for a whole decade. Smart card technology was pioneered by Sony in the form of their Felica branded technology, and went on to embedded into cards, phones, turnstiles, cash registers, and door locks. But that is just one piece of the puzzle.

Most people who have been here for a while can remember vividly a time when only major department and electronic stores accepted credit cards. Even if you found yourself in one of these places ready to purchase something, you stood a 50/50 chance of having your card be declined because it wasn’t the store’s “preferred card issuer.” And forget about trying to shove that foreign card in whatever random ATM you could find because you’d hit a similar wall. Believe it or not though, even Japanese citizens had a hard time dealing with this too. Cash is king here, and in super-safe Japan you’ll probably be run over by an errant bullet train before being involved in a robbery. Still, walking around with a fat wad of bills just isn’t as convenient as carrying a card that can access your scrilla on demand right?

In the US and Europe, this issue was solved by Visa and MasterCard coming up with debit cards that could be accepted wherever their credit cards were. Japan Inc went off in a different direction and decided to create reloadable E-Money cards. Most people already had point cards that would accrue points that can be redeemed for cash value at whichever store offered them; think of them as “frequent shopper’s cards”. At first these companies just extended that model and created a method for the card holder to add points to that card directly at the register in the form of paying money for points. Some people started using this ability to store money since that’s effectively what the points were.

The next innovation came from EDY Corporation who set up a contactless card using Sony’s NFC technology called Felica and partnered with several stores, restaurants, and attractions to accept their standard. Notably, almost every convenience store along with Japan’s online retailing giant Rakuten began accepting the card for payment settlements as well, meaning anything from a late-night bento to a brand-new car could potentially earn points. Seeing a potiential money-maker, other companies like Japan’s (and probably all of Asia’s) biggest retailer Aeon,

What finally pushed E-money cards into everyday use was when Japan’s major transit card issuers decided to create a unified system where a passholder can use the stored-fare value outside the pass issuer’s jurisdiction. For example the holder of JR-East’s Suica can use their stored value on a train trip on Osaka’s Hankyu lines without needing to have a Pitapa or ICOCA, cards that usually are offered in the Kansai area. Of course the stored monetary value isn’t just relegated for bus and train trips however; Most major convenience stores, department stores, and certain chain restaurants along with vending machines also accept these cards, effectively making them E-money cards in their own right. It comes as no surprise then that most people here in Japan use these ‘IC cards’ as a means of replacing ‘pocket money’ these days– including myself.

Lastly, let’s also not forget that Japan has a very mobile-phone centric population these days; while Americans were wondering why anyone would take pictures with a cellphone back in 2003, Japan was already in the throes of developing the first mobile-friendly internet and applications via services like iMode. By 2006, Sony had developed the predecessor to today’s NFC standard in the way of FeliCa, and promptly signed a deal with DoCoMo, Japan’s #1 carrier to shoehorn a nearfield wireless chip into every cellphone it made. Of course, as DoCoMo does, the others do, and it wasn’t long before everyone had the power to use Osaifu-Keitai or “wireless wallet” services thanks to the fact that the aforementioned Edy, iD, and even Suica made wallet apps for mobile phones. In other words, not only is Apple “Columbusing” NFC payments, but so is Google, and any other company outside of Japan that claims they’ve invented a mobile phone wallet.

How can I try this for myself?

Well if you’re already here in the country, then simply head on down to your favorite train/bus station and buy one of the major transit IC cards that are available. Like I mentioned above, it’s simply the easiest way to take advantage of the conveniences of E-money, and chances are, you’ll be using the transit part of the card anyway.