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Japan Is Ready and SET for Net Shopping. Sumitomo and

Ray Van Eng (02/03/97) To shop or not to shop on the Internet? That is the question many Japanese ask themselves these days. The answer seems to be a resounding yes and that has prompted the Sumitomo Credit Service to seek out the U.S. based Verifone Inc. as a technology partner in setting up cyber shopping services. Sumitomo's 1.7 million merchant customers will soon be able to use Verifone's vPOS, vGATE, and vWALLET software to setup SET-compliant credit card payment processing systems at their web sites to handle credit card sales over the Internet. The services are set to begin in the second quarter of 1997. SET is an Internet specific protocol formulated by Visa International, Mastercard International, IBM and others. Although SET has not been finalized, the present version is regarded by many as reliable enough to devise payment processing solutions for e-commerce over the Internet. Sumitomo remains to be Verifone's first customer to use their SET software. Last year, a survey by CyberSpace Japan Inc. found that 49% of Japanese Internet users said they wanted to give Internet shopping a try in the near future. A recent IDC/LINK study also suggested that of those who have personal computers at home in Japan, about 18.4% were connected to the Internet, the highest in the world even surpassing the U.S. at 16%. Experts cite the high cost of real estate, operating expenses and the Japanese recession as primary reasons why Japanese businesses are now considering using alternative retail outlets to distribute products more economically while enabling consumers to increase their purchasing power by buying through lower cost merchandizing channels. Besides savings on the associated cost of maintaining a physical presence in a shopping mall and stocking retail shelf spaces, Internet shopping services and in particular point-of-sale (POS) solutions like the one Verfone is championing could be used to track consumer buying habits over a period of time. Such POS information is extremely useful in forecasting sales volumes and purchasing patterns and in helping Japanese manufacturers to implement just-in-time (JIT) techniques that would allow them to produce just the right amount of stock for consumption to maximize profits and reduce waste. JIT logistics and related technologies are becoming very important in a goods producing society where a general consumer product would last only 90 days or less on store shelves. E-Mail

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