Lost Without Cash.(International Edition; TECHTONIC SHIFTS)(use of prepaid card)

Byline: Akiko Kashiwagi

As soon as I started using e-cash, I was hooked. But Japan supports six cards, each incompatible with the others.

Commuters in Tokyo's crowded trains and subways need any advantage they can get. For about a year, I have been enjoying the benefits of the railway's e-money smart card, a prepaid card that replaces the conventional magnetic card. Instead of inserting a card in a slot, passing through the turnstile and taking the card on the other side, all I have to do is flash my plastic smart card and proceed. The prepaid card also saves me from calculating all the different fares on Japan's complicated rail and subway systems--where different lines are often operated by different companies--on those occasions when I have to switch among several lines. A big part of the card's appeal is that I can also use it at a growing number of kiosks, convenience stores and cafes. I can buy my morning newspaper in a millisecond as I dash for a train that has already arrived on the platform.

Japan is way ahead of most other countries when it comes to cashless payment systems. Over the past two years, Japan has seen a phenomenal rise in smart card payments. Nearly 100 million cards in circulation nationwide accounted for transactions worth about $8 billion in 2007, says to Nomura Research Institute, quintuple the number the year earlier, and that rate shows no sign of slowing. Nomura Research Institute expects cashless payments to grow by 60 percent in value this year. The problem, as I quickly found out, is that there are just too many different cards. Japan now supports six, each incompatible with the others. And this lack of compatibility is a pain.

As soon as I started using a smart card, I was hooked. The idea of fumbling for coins or bills began to seem like a useless hassle. I was disappointed, though, when I found out that the convenience store near my office and the supermarket chain stores I frequent do not accept the rail card. To go cashless, I had to acquire an Edy--the oldest and most widely accepted prepaid card system in Japan. It meant I had to remember to replenish two cards when their balances run low and find more room in my already bulky wallet. But I was OK with that, if it meant I could go cash-free. And for a few days I did.

Then I walked into a 7-Eleven. Anybody who wants to go cashless in Japan has to have a card that works in the biggest convenience-store chain in the country. But 7-Eleven accepts neither the rail card nor Edy, but instead asks customers to buy its own proprietary card, the nanaco. If I were to go cashless, I would have to start using a third card.

It would seem high time for some kind of unified system, but marketing experts don't see this happening soon. Japan's smart card is ...