Sony Corp's Edy electronic money system will be used by UFJ Holdings Inc and six other consumer finance companies to boost credit card use, according to the system's developer, Sony subsidiary BitWallet Inc.
UFJ, Japan's fourth-biggest lender, along with Sumitomo Mitsui Banking Corp, Sony Finance International Co, Life Co, DC Card Co and Kokunai Shinpan Co will adopt the Edy function into new or existing cards by the end of March 2004, BitWallet spokesman Makoto Yamada said.
Edy cards are already sold and accepted at some convenience stores. Users pay to add value to the cards, which are fitted with a microchip to store balance information. The finance companies hope adding the prepaid option to their cards will attract customers and boost overall use, including paying with credit.
"They can boost convenience for their credit card users by offering another way of payment," said Minoru Hattori, an analyst at Okasan Securities Co. "They don't have to do anything extra by adding Edy to their cards."
Sony already supplies its electronic card technology for prepaid, or stored-value smart cards to East Japan Railway Co for travel payments, and has delivered 12 million FeliCa smart cards to Octopus Cards Ltd in Hong Kong, a company controlled by the government-owned subway operator MTR Corp and four other transport operators. The popular Octopus cards are used for travel and retail payments. FeliCa cards are also used in Singapore for travel, according to Sony's Web site.
BitWallet was established in January 2001 by Sony and other investors, including NTT DoCoMo Inc, Japan's biggest mobile phone services company, to develop and manage the Edy prepaid smart card system. Sony group companies own 46 percent of BitWallet, while NTT DoCoMo has 14.7 percent. Sumitomo Mitsui group companies also own 11.9 percent.
BitWallet said last November it aims to have 8.5 million cards and 23,000 customers by March 2004.
UFJ Card Co, a unit of UFJ Holdings, will issue the so-called stored-value smart cards to about 600 employees in Tokyo in November, said Masaya Mizutani, planning section chief at the company.
UFJ Card, which has 8.6 million of cardholders in Japan, is aiming to draw new users by adding value to its credit cards, Mizutani said.
"Charming customers by improving cards functions is the most significant to get new cardholders," Mizutani said.
Sumitomo Mitsui Card Co also plans to offer the Edy feature on its credit cards, company spokesman Hiroyasu Tomita said. That Edy is already in use boosted its attractiveness, he said.
"Sony's Edy system already has an infrastructure," Tomita said. "In that sense, it may be the most influential in the market."
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