As many a frustrated visitor to Japan has noticed, using your trusty old credit card here can be tricky. Cash is still by far the most preferred payment method, with many retailers only accepting plastic for big purchases.

  Yet, another type of card is fast gaining popularity; multifunctional, contactless smart cards that can serve as money, ID and travel cards at the same time. At Mitsubishi Electric, for instance, the employees' new ID badges double as rechargeable cash cards and travel passes. The badge was created in partnership with East Japan Railways, whose Suica® card is currently battling it out with the competing Edy® card in the race to develop a viable e-money system.
  As roughly 38% of Tokyo's commuters use trains, a combined e-money and travel card makes perfect sense. As the cards can be recharged outside the station area, ticket machine crowds can be reduced. Also, as fewer ticket machines are needed, precious floor space can be used by shops and restaurants. Finally, passing the ticket gate is very smooth, as the passenger only needs to pass the card above a sensor.

  For shopping, many Japanese value the convenience and safety of e-money cards. Not only can shoppers pay the exact amount instantly, many also feel safer about loss or theft as the cards are not connected to bank accounts. The stores themselves also benefit, as they can collect data on the purchases and use it to increase sales.
  But it doesn't stop there. From January 2006, a new Mobile Suica® service will allow mobile phone users to use their handsets as e-money cards. Mobile Suica® users will also be able to buy commuter passes, shop online and make "ticketless" train reservations via their handsets.
  Whether e-money in Japan can seriously challenge cash remains to be seen. But it is fast becoming an integral part of modern urban life.