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Electronic cash devices breach 100 million barrier

Wave goodbye to banknotes, say hello to e-cash

Anyone doubting the likely spread of Japanese-style electronic cash to the West that we've been predicting for some time need only look at the latest data on how many people there are actually using e-cash.

According to Nomura Research Institute, 100 million mobile phones with the necessary chips and electronic money cards had been issued in Japan by the end of June this year.

Recent technology

In a population of 127 million, that clearly represents impressive penetration for a technology that is, in practical terms, just four years old.

In terms of value, those cards and phones were used in fiscal 2007 to buy almost ¥850 billion (£4.1 billion) worth of goods. Most spending was on small-value items and services, such as local train travel and convenience-store goods.

Growth inevitable

That's still a drop in the ocean beside the amount spent on credit cards, which accrued 50 times as much over the same period. However, Nomura predicts that e-cash transactions are likely to be worth ¥3.3 trillion (£16.2 billion) by 2012.

The implications for the West are clear – catch up with the e-cash revolution or be left behind with your grubby old banknotes and coins.