E-money gains further ground in Japan

February 15, 2006

It's been a year since East Japan Railway decided to concentrate on getting more of its riders to use an electronic money system for everything from buying commuting tickets to purchasing magazines for the train ride. The system is easy enough to use, as riders buy a prepaid card that has a minimum balance of $18 (2,000 yen), which they swipe across the entry gate of the train station to board their ride. In addition, the card can be handed over to cashiers at newsstands operating inside the stations, so that riders can buy goods through the electronic money card.

Moreover, as of January, the railway group has tied up with both NTT DoCoMo and KDDI, two of the country's biggest mobile carriers, to develop cellular handsets that can have the electronic Suica card built in on the back. So instead of digging through a wallet for the card, users can simply swipe their mobile phones onto the train station's gates to gain entry.

Given that East Japan Railway operates one of the busiest networks in the Tokyo area, demand for Suica cards has been strong. In addition, the network has tied up with a slew of retailers so that the cards can be used to purchase goods beyond train stations. In a country that continues to eschew using credit cards for small purchases, the electronic payment system has proved to be particularly popular with consumers of all ages.

The success of the Suica card has certainly inspired other companies to bolster their electronic money system, including other transportation groups.

This week the West Nippon Expressway highway group said it too will introduce its own version of electronic money. Its SAPA card will be available on a pilot basis at 53 service stations along the highway in the Kyushu region of southern Japan from April 2006 to March 2007.

Like the railway card, the prepaid SAPA card will allow those on the road to purchase goods at service stations along the highway. It will not, however, be as convenient as the Suica, given that the West Nippon Expressway group will only have one machine available per station while the program is still in the pilot stage. In addition, not all service stations along the road will be equipped with even one machine to read the card.

Another problem is that the card cannot be used to pay for tolls or gas either. Yet despite such limitations, the West Nippon Expressway group pointed out that the experimental period will remain crucial to gauging the future success of the card, and having it available on a pilot basis will allow the company to iron out any problems the system might have before it is formally adopted.

Copyright 2006 by United Press International