J-Coin Release to Have Low Merchant Fees, Play Nice With Alipay

Back in late September, when most of us were wondering if the weather would ever cool off—if we only knew, eh?—word first emerged about J-Coin, a digital currency issued by Japanese banks led by the Mizuho Financial Group. Now, more word has emerged, and J-Coin has a big future in front of it.

The biggest news is that processing fees for J-Coin are set to actually be lower than fees paid for credit card processing. That will make J-Coin transactions especially desirable for merchants, and potentially lead to them even cutting off some credit card trade in favor of J-Coin.

Rather than leaving it to chance, however, early word says that J-Coin will get a pilot program, with just one or two locations offering J-Coin transactions starting in March. Those in charge will be watching to see if the project gains momentum, particularly if “…the benefits to users and participating merchants become clear,” according to Mizuho president Yasuhiro Sato.

Perhaps the biggest surprise was the revelation that J-Coin would need to be compatible with Alipay before its release. Since Alipay is widely used by Chinese consumers, that could represent a potential demand source for any of the growing Chinese tourist classes looking to go abroad into Japan. Given the rocky relationship between the two countries in the past, that could be one of the biggest points of news about the entire J-Coin concept.

Digital money is really starting to take off, and why not? It operates on the same basic principles as a fiat currency anyway, just without the unpleasant added costs of paper, ink and printing fees. A lot of currency is digital anyway, particularly that which is transferred among banks, so why not just cut out the middleman and start offering the currency on a digital basis? Granted, a lot of people aren’t going to like this notion, but if even a third of the population goes digital, that’s a third fewer dollars or yen or whatever to print. That’s cost savings in pocket.

It will be worth watching to see if J-Coin, the digital shekel, and others like it actually take off. If it does, it could mean cost savings for government, which will help in lowering taxes. At least, we can hope it will.