Tokyo taxis to start accepting e-money payment

The deals, which involve BitWallet Inc.'s Edy system and East Japan Railway Co.'s (JR East) Suica system, are the latest in a string of agreements from major retailers to accept e-money in lieu of conventional cash for purchases and services. They come as technology for the systems, which are both based on Sony Corp.'s Felica touch-and-go proximity smart card platform, is on the verge of becoming a standard feature in cell phones.

This week's announcements mean that from August this year all 2,552 taxis operated by Chuo Musen Taxi will begin accepting payment using Edy and from next year 2,798 taxis belonging to Nihon Kotsu Co. Ltd. and 2,242 taxis belonging to Kokusai Motorcars Co. Ltd. will accept payment by Suica e-cash. The three taxi operators are among the largest in Tokyo.

After a slow start e-money is rapidly gaining pace in Japan.

Edy, which is backed by Sony, NTT DoCoMo Inc. and a number of other financial institutions, can be used in around 31,000 places in Japan including convenience stores, restaurants, department stores and karaoke centers. In addition to dedicated Edy cards the feature is also built into some credit cards, airline mileage cards, office identification cards and recently cell phones. BitWallet says about 17 million Edy cards have been issued of which about three million are cell phones.

The competing Suica system began as a prepaid travel pass for use on JR East trains in the Tokyo area but it's been expanded to include an e-cash function. Almost 12 million Suica cards with the e-money support have been issued and there are 5,700 places where they can be used. E-money transactions using Suica cards, not including travel use, currently total about 260,000 per day, said JR East.

Both systems originally required plastic cards although now many cell phones are available with Felica support built-in. That means users can add Edy or Suica functions by just downloading the respective application for the phone. Because of the wide penetration of the Felica platform it's also being used for other systems such as retail loyalty cards, and NTT DoCoMo recently began operating a Felica-based credit card payment system. Like the e-money service that allows users to make payments with their phone and not bother with plastic cards.