Justin Geaney said,

April 16, 2006 @ 2:21 pm

Credit cards are already heading in a blurry direction over here in Japan. It all started with micro-purchasing smart cards called Suica that allow you to get on and off trains using a pre-paid declining balance card. The locals loved this but then began complaining about having to line up to recharge their cards (imagine if they had to return to buying a ticket every time!!).

So the next step was a Suica Visa that just tacks on your train costs to your monthly credit card bill. Recently Suica has been extended to convenience stores as well… so people are just holding up their wallets (no need to take the card out as it has an RFID chip in it) to buy most things.

Now this is where it gets blurry… mobile phone companies realised that people want to carry less… who needs a wallet when you can just pay for things by holding up your phone?? So yep… that is where we are now. People have cell phones that are linked to their credit card bill… and the places you can use them are expanding by the day… give it a year and I am sure you won’t need a wallet here. Even your receipts are digital and tracked in the handset. Just like your train pass appears in digital format in the phone! In fact, I bought an e ticket to fly to Beijing in May and it is truly an e ticket, with my only record being stored in my phone.

As for the virtual world… Japanese people also play these online games, but usually from their cell handsets… so now they can pay for things that don’t even really exist using their phone which has replaced their wallet and gets billed to their credit card… it is all about tricking the consumer into believing that purchasing online and in bricks and mortar stores is the same, and as this becomes more ubiquitous I believe people will begin to forget the difference between tangible and intangible products and shop more and more for things they don’t really need.

The credit card company revenue generated by this scheme is the true origin of Mastercard’s famed slogan – Priceless!!