Cashless Payments [Article 2] More Cashless Stores Opening in Japan, Service for Collectively Supporting Various QR Code Payments Launched

In October 2018, two new stores that proclaim to be cashless appeared in Japan. One is an experimental store that opened on Platforms 5 and 6 at Akabane Station of East Japan Railway and the other is Oedo Tenya Asakusa Kaminarimon, a two-minute walk from Asakusa Station.

Check Users' Movements and Identify What They Buy with Cameras

The cashless store at Akabane Station is an unmanned convenience store that recognizes what items users take out by tracking their movements with cameras and other sensors. It is operated jointly by East Japan Railway and a JR East startup. Holding a transportation-type IC card, such as Suica, over the sensor when entering the store causes the door to open. Standing in a specific area when checking out causes the display to list items in hand or in the bag. A self-service payment is made by confirming it and touching the transportation-type IC card. This does not require any sales assistant to deal with payments, thereby making it possible to operate the store as an unmanned convenience store.

This experiment is the second in a series of demonstration experiments of unmanned convenience stores conducted by East Japan Railway after the first one conducted at Omiya Station in November 2017. Compared to the last experiment, item and payment recognition rates are high. In addition, the experiment period is two months, instead of one week as in the last experiment. Still in an experimental phase, the store is limited to both the number of visitors who can enter the store and the items that can be bought at one time. Even so, the new purchase experience at the convenience store, which can be used in the same way as a vending machine, is refreshing.

Experimental convenience store with a self-service payment system established on Platforms 5 and 6 at JR Akabane Station
For the time being, only three people can enter the store at one time.

Cashless Payments Help Facilitate Employees Work

Oedo Tenya Asakusa Kaminarimon, on the other hand, can be used as easily as any other normal fast-food tendon (a bowl of rice topped with deep-fried fish and vegetables) restaurant except the signboard in front of it clearly states that it is a cashless restaurant. Although placing orders using a display is self-service, payments by credit card and by electronic money are made through face-to-face interaction with employees. Although cash is not accepted, payments can be made with credit cards, various electronic money and transportation-type IC cards, and by Alibaba Group's Alipay and Tencent's WeChat Pay--payment services with which most Chinese people have accounts.

This cashless restaurant has the effect of creating a more efficient and easier-to-work environment. The system also provides the benefit of eliminating employees' workloads required for passing and receiving small change and even has the effect of reducing security costs required for safely storing and transporting cash.

Oedo Tenya Asakusa Kaminarimon and a billboard in front of it announcing that cash is not accepted

Oedo Tenya Asakusa Kaminarimon is not the first cashless restaurant of Royal Holdings Co., Ltd., the operator of the chain. The first restaurant is Gathering Table Pantry Bakurocho, a café restaurant that opened in Bakurocho in November 2017. At first, the café restaurant was similar to other normal café restaurants in terms of paying for items. Starting from July 2018, however, self-service payments using tablet devices became available for some electronic money services. This enabled users to perform both order placement and payment procedures by themselves instead of requesting employees to do so. This elimination of employees' involvement in customers' orders and payments has led to an increase in the time spent doing other tasks, which is likely to help facilitate their work and spend more time carrying out tasks to boost the value of the café itself.

Gathering Table Pantry Bakurocho, a cashless café operating in Bakurocho, Nihonbashi and a billboard hung next to the entrance that announces cash is not accepted

QR Code Payments, Vital to Cashless Stores

Cashless stores, which can also be seen in Japan now, use the following three major payment approaches. The first is the cashierless automatic payment approach, as represented by Amazon.com's Amazon Go and JD.com's JD.ID X-Mart. This approach uses cameras and sensors so that the store can determine which items are bought and automatically settle payments at the time of checkout. To achieve automatic payments, customers must check-in by using a smartphone app or by other means when entering the store.

The second is the self-service payment approach: users confirm purchased items and carry out payment procedures by themselves when checking out. This approach has been adopted by East Japan Railway's experimental store and Gathering Table Pantry Bakurocho. The third is the cashless payment approach: payments are made through face-to-face interaction with employees but cash is not used.

What to pay attention to in cashless payment approaches is that smartphone app-based QR code payments are widely accepted. In China, where Alipay and WeChat Pay in particular are quite prevalent in daily life, QR code payments are available in many stores.

There are two QR code payment methods. One is achieved by a store putting QR codes for item prices and users scanning those QR codes using a smartphone app. The QR codes used here are universal and thus referred to as static codes. Stores simply prepare static codes printed on paper enabling them to easily sell items with QR code payments. In fact, more than a few small stores in China, including street vendors, accept QR code payments. However, static codes are incomprehensible to people, which is causing problematic fraud in which people with malicious intent replace QR codes found in stores, thereby changing the payment destinations.

The other QR payment method is achieved by users generating QR codes that correspond to their IDs using a smartphone app and stores scanning them. QR codes generated using a smartphone app vary depending on the time they are generated, therefore they are referred to as dynamic codes. Since dynamic codes are associated with correct information via special servers, they are highly secure.

Gateway Service That Supports Multiple QR Code Payments Launched

Since more domestic electronic money services have started to adopt QR code payments, it may be a good idea to accept QR code payments when promoting cashless stores in Japan now. However, QR code payments require a separate system for each electronic money service, which makes it difficult to support many electronic services. A new solution to this problem, namely Switching Gateway, was recently launched by Toppan Printing and Fujitsu FIP Corporation.

Switching Gateway is a payment information relay service that enables POS registers for retail outlets to support multiple smartphone-based QR/bar code payment services collectively. This solution links Alipay, WeChat Pay and domestic QR/bar code payment services to on-premises POS register systems, thereby making it possible to deploy multiple payment services to POS registers fast and at a low cost.

Deploying QR code payments to a store makes it possible to obtain customer purchase history, or the history of which items each customer bought. Analyzing this data provides an understanding of each customer's likes and lifestyle and can help devise and implement marketing measures based on their likes. When considering a cashless store, attention tends to be focused on the aspect of streamlining employees' and customers' movements in the store. However, the fact that each customer's purchase history can be obtained is also extremely important.

When smartphone payments become commonplace in the future, point cards distributed by individual stores will be provided as smartphone apps. Then, each QR code payment allows points to be added automatically, which may help us not to make mistakes such as inadvertently forgetting point cards at home.

The next article reports on a new project that leverages the payment information unique to cashless payments, such as obtaining purchase history and performing individual authentication at the time of payment.

Author Information
Tetsushi Hayashi
Chief Research Officer
Cleantech Institute
NIKKEI BP Intelligence Group
Graduated from Tohoku University's Faculty of Engineering in 1985 and joined Nikkei Business Publications, Inc. in the same year. As a reporter and assistant editor for Nikkei Data Pro, Nikkei Communication and Nikkei Network, he wrote about advanced technologies related to communication/information processing as well as trends in standardization/commercialization. Chief Editor of Nikkei Byte in 2002, Chief Editor of Nikkei Network in 2005, and Chief Editor of Nikkei Communication in 2007. Publisher of ITpro, Nikkei Systems, Tech-On!, Nikkei Electronics, Nikkei Monozukuri, Nikkei Automotive, etc. before becoming Director of the Overseas Business Division in January 2014. Has been in his current post since September 2015. Writing the series Jido unten ga tsukuru mirai (A Future with Self-driving Cars) since August 2016 on Nikkei Online Edition. Issued Sekai jido unten kaihatsu project souran (An Overview of Global Self-driving Development Projects) in December 2016 and Sekai jido unten/connected car kaihatsu souran (An Overview of Global Self-driving/Connected Car Development) in December 2017. Has been serving on the CEATEC Award Review Panel since 2011.