Electronic Money

Electronic money is a general term for mechanisms that record value as electronic data instead of cash and use it for payments. Broadly speaking, there are two types: the IC card type (Suica, WAON, nanaco, etc.) and the QR code / barcode type (PayPay, Rakuten Pay, d Barai, etc.). With the former, you pay by holding the card over a reader using NFC (Near Field Communication), and with the latter, you pay by presenting or scanning a QR code on the smartphone screen.

Behind the rapid spread of QR code electronic money lies its low introduction cost. The IC card type requires a dedicated reader terminal (from tens of thousands of yen), but the QR code type can be introduced simply by the store printing a QR code and displaying it next to the register. Because it can be started without a terminal, adoption has progressed even among small independent shops and food stalls.

In terms of security, QR code electronic money uses one-time codes (QR codes that become invalid after a set period) to prevent screenshots from being reused. In addition, because balance checks and double-payment prevention are processed on the server side at the time of payment, no monetary value is stored in the QR code itself. The QR code is merely a "key for starting a transaction," and the actual balance management takes place in the cloud.