The JCB Way: Payment Glocalisation
Mr. Koremitsu Sannomiya, President and COO, JCB International Co., Ltd.
March 31st 2014. That is the day when the sales of traveller’s checks, which for a long time had been a must-have for travelling, were terminated in Japan. I recall the strong emotion I felt at the time because payment cards had now become common as a payment method for travellers after more than a half century had passed since they were introduced in the 1950s.
In the history of payments, travellers first paid with cash, then with traveller’s checks, and now with payment cards, resulting in more convenient and secure payment than ever before. While this development has led to growth in consumption at the destination, the needs of travellers have also led to evolution in the payment system, which has created a positive spiral. The tourism industry and the payment card industry have been, and will continue, growing synergistically.
The penetration of payment cards has been brought about by common global standards developed by the global payment schemes and the infrastructure set up by payment operators in each country in accordance with the global standards. Thanks to this effort travellers can use their payment card with confidence regardless of country or currency, and enjoy a more diversified range of travel activities than before.
However, while the payment system has secured interoperability at the global level, now we are seeing something different. That is the new trend toward localisation: the pursuit of local identity and profit, exemplified by inbound travel visa restrictions and trade protectionism. While diverse reasons are given, such as the protection of personal information or economic rationality, more and more local and regional payment schemes pursuing local identity are appearing in various areas. Local scheme payment systems have a unique identity that improves convenience for local cardholders’ day-to-day payment based on the infrastructure and business practice. However, while that kind of payment system should be respected, it only benefits cardholders inside the country, and causes the loss of universal acceptance outside the country. In addition, local schemes need to address information security and anti-money laundering measures as well as high-cost infrastructure, which require high expertise and technical skills. It’s quite challenging for local schemes to set up and maintain their infrastructure.
That is why we, as one of the global payment schemes, believe it is time to further evolve our payment systems. We have come to the conclusion that it is essential to connect the universal acceptance we have created so far with unique identity leveraging regional characteristics so that cardholders can enjoy the benefits of both a global brand and a local brand with one payment card. In other words, what JCB must aim for is to realise payment ‘glocalisation’ which enables a seamless connection between the local and the global.
Based on this idea, we are working to support and collaborate with local schemes by providing the functions and know-how of the JCB payment system. That will enable the local scheme to set up an infrastructure combining local identity with global versatility with a minimum amount of effort and time.
Another big movement is the evolution of technology such as smart phones. Each individual person has a smart phone which is connected with an information network and utilises new services such as Google Maps and Uber to diversify travel style and enjoyment. In the payment industry, we are also seeing innovative technologies and services, such as Fintech.
We are committed to respecting the needs and market environment of each locality, and expanding payment schemes that provide users with better services by utilising the latest technology based on the expertise JCB has built up over the years without being trapped in traditional methods.
We are therefore aiming to achieve further growth and expansion together with the tourism industry so that all users in the world can enjoy travelling with greater confidence than ever before.
This article was contributed by a WTTC Industry Partner and published in March 2017 as part of the annual update to the Economic Impact Research from WTTC. The full report can be found here.