The Edy electronic money system created by BitWallet, a 25-member
consortium headed by Sony and NTT DoCoMo, is to be adopted by seven
of Japan's major banks and credit card companies for use with their
credit cards.
The move is expected to result in the Edy contactless cash system
becoming an industry standard.
The seven companies that have decided to adopt the Edy system on
their credit cards are UFJ Bank, Life, Daiei OMC, DC Card, Kokunai
Shinpan, Sumitomo Mitsui Card and Sony Finance International.
The Edy system, which is based on Sony's Felica contactless
integrated circuit card, does not require the card to be inserted
into a special reader. The system can be activated for money debits
when the card is placed within 10 centimetres of an Edy sensor. As
money is stored on the card beforehand, the payment process takes
0.2 seconds to complete. The in-store terminal communicates with
the Edy data centre once or twice a day to reconcile transactions
and to check for fraud.
The system is targeted at places like convenience stores where
small cash payments are typically made, said Makoto Yamada, a
senior manager of business planning at BitWallet. By embedding the
Edy system on the credit cards, which are usually used for the
payments of large amounts, these seven companies hope to add value
to their credit cards by allowing them to be able to use as a
substitute for cash, he said.
BitWallet expects to circulate 8.5 million Edy-embedded cards by
the end of 2003, and hopes about one-third of them will be issued
by these seven companies, Yamada said. "As there is no competitor
in the industry at the moment the Edy system is likely to become
the standard," he said.
By mid-July, BitWallet had issued around 250,000 Edy contactless
integrated circuit cards. The cards can be used at stores in
several areas in Tokyo. Over a thousand AM/PM convenience stores
across Japan are now accepting Edy contactless integrated circuit
cards, Yamada said.