- 麗澤経済研究 (ISSN:09196706)
- vol.15, no.2, pp.97-112, 2007-09
The year of 2007 will be remembered as the beginning of the second development stage of electronic money (e-money) in Japan. This is because of the introduction of three new e-money, namely PASMO, nanaco and WAON, in addition to the two prevailing e-money of Edy and Suica. In this paper, the definition and characteristics of e-money are discussed in Section 1. The most important point is the judgment that e-money is not a new type of money but a new type of payment instrument. In Section 2, the similarities and differences between Edy and Suica are examined in order to clarify the structures and features of e-money in Japan. Edy is managed by bitWallet Inc. and Suica is issued by East Japan Railway Company. Both e-money are issued by private companies, use the same contactless IC technology of FeliCa, set the upper limit of charge, and adopt Closed Loop scheme. Some differences are pointed out, including traffic-oriented card vs. multi-purpose card and three-cornered model vs. four-cornered model. These discussions are followed by the introduction of three new e-money in Section 3. PASMO is issued by private railway and bus companies and has total interoperability with Suica. WAON and nanaco are issued by major retailer, AEON and Seven & I Holdings, respectively. In Section 4, the background of the development and spread of e-money in Japan is discussed. Several factors such as the wide usage of cash settlement, and the underdeveloped stage of Debit Card are indicated. As the last part of this paper, the future developments of e-money in Japan are discussed, which include the change of e-money media from the card to the mobile phone, the move to standardize e-money terminal, the usage of both prepaid e-money and postpaid credit service on the same mobile phone, and the growing recognition on the economic merit of e-money. With these tendencies, it is predicted that the e-money will be used much more widely in Japan in the future.