The Edy electronic money system of BitWallet Inc., a 25-member consortium headed by Sony Corp. and NTT DoCoMo Inc., will be adopted by seven of Japan’s major banks and credit card companies for use with their credit cards, BitWallet said Monday. This is expected to promote the Edy contactless cash system to become an industry standard.
The seven companies that decided to adopt the Edy system on their credit cards are UFJ Bank Ltd., Life Co. Ltd., Daiei OMC Inc., DC Card Co. Ltd., Kokunai Shinpan Co. Ltd., Sumitomo Mitsui Card Co. Ltd. and Sony Finance International Inc.
The Edy system, which is based on Sony’s Felica contactless IC (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 originally targeted at places like convenience stores for small cash payments under a limit of around 2,000yen (US$17) or 3,000yen, 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, hoping 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 IC cards. The cards can be used at stores in several areas in Tokyo. From July 19, over a thousand AM/PM convenience stores across Japan began accepting Edy contactless IC cards, and the company expects that more cards have gone into circulation since then, Yamada said.