Now touted as the home of the electronic wallet, Japan was until quite recently a cash based society where only the lucky few enjoyed access to credit cards. Here we take a look a few recent trends in consumer payment methods in this country of fanatical shoppers.

It may be shocking to hear but the 24-hour ATM did not arrive in Japan until around 2004. Until that time, it was usual for bank ATMs to shut down in the evenings shortly after the bank branches themselves had closed for business. The big change happened when ATMs moved into Japan's ubiquitous convenience stores. Now, its possible to withdraw cash from various banks at such convenience store ATMS throughout the country at anytime. This includes cash withdrawals on international credit cards that are linked to the Cirrus or Plus systems. So for visitors to Japan, this means no longer having to deal with the higher exchange rates typically charged at the hotels.

In JMI's 2003 survey on cash and banking practices, it was found that maximum amount of cash that the Japanese felt comfortable carrying in their wallets was, on average, a startling 208,000 yen (around US$ 2,000 at today's exchange rate). It can be safely assumed that the 24-hour ATM has impacted this attitude and that Japan has finally moved away from its unique position as being an advanced economy operating mainly on cash transactions.

There's a new kind of shopper around town! Figures from the Nikkei suggest that the nearly 1 million a year Chinese visitors to Japan outspend all other tourist groups... and by a considerable margin. Take a walk on Japan's main shopping streets and its noticeable that more and more shops are brandishing the Union Pay (China's National debit card brand) logo. From the back streets of the trend fashion district Harajuku to a northern most city of Sapporo, the Chinese are now enjoying the convenience of shopping in Japan and paying with Union Pay card. But what are they buying? Well there are no holds barred; everything from electronics to cosmetics and brassieres. With the upcoming Olympics at hand, we will soon see the same Union Pay card being offered to Japanese traveling to Beijing.

In Japan, the keitai saifu (or mobile wallet) is rapidly gaining popularity. According to figures from the retail association, as of 2007 there were 2.6 million users. The mobile wallet provides the convenience of one device that is simply touched on to an automated reader to complete purchase. Moreover with the telecom companies now tying up with national transportation companies (trains, taxis and buses), retail stores, convenience stores, restaurants and vending machine companies; the opportunities for payment using the mobile are growing rapidly.

While theft might be a significant concern for mobile wallets in most countries, Japan still enjoys one the lowest crime rates among developed countries, so this is not seen to be an impediment to the adoption of this new payment platform. In Japan the future is now!

A final observation in the area of security. While in most countries, it is now common to protect cash, debit, or credit cards with ICs and or holograms, in Japan it is possible to further protect cards from ATM thieves by using fingerprint authentication. The card owner's finger print signature is encoded on their card and before money can be withdrawn from the ATM, an electronic or optical reader must first be used to scan the owner's finger. Next generation technologies being developed by Japan's leading telecom company, NTT, will be able to distinguish a real finger from a fake one made of silicon or gelatin. Even James Bond (007) would have trouble with this one!