Japan Cardnet Provides Next-Generation Payment Solutions

The Japan Card Network Company (Cardnet), cooperatively formed in 1995 by the major Japanese credit card organizations, provides support and services for credit card companies and member stores. According to Cardnet’s Daisuke Murakami, the idea for Cardnet came from “an awareness of the need to create a system infrastructure that would keep pace with new financial services that were being introduced globally.”

Cardnet offers a variety of payment solutions for credit companies and member stores, including the JET Series card processing terminals, a service that connects member stores with credit card companies and financial institutions, and a data service that transmits sales and related information on validated cards. To respond to the expanding Internet environment, since 1999 the company has also offered the Electronic Commerce (EC) Settlement Service, which supports credit card transactions via the Internet. And Cardnet continued to plan for the future: “While we had established networks to connect credit card companies with member stores, we also wanted to develop a new settlement infrastructure for the next generation,” says Mr. Murakami.

More Payment Options = More Customers

Conventional e-commerce systems handle only credit payments. Cardnet envisioned a new system called Net Debit that would allow direct debit payments from consumers’ bank accounts. According to Kei Asai, assistant vice president of Electronic Commerce at JCB, one of Cardnet’s largest customers, “In Japan, credit cards account for only a small percentage of total personal usage. To reach the 20 percent level of the United States, the market would need to triple or quadruple.”

And, he continues, “Although most online settlements are made by credit card, there are some people who still choose not to use them.” Thus, developing the business-to-consumer (B2C) market means providing a range of payment options, which not only increases the certainty of debt settlement but also helps bring in new customers. A debit system, Mr. Asai says, “offers these people an alternative.”

The Right Solution—From the Ground Up

“We thought about adding a debit settlement system to the existing infrastructure,” says Mr. Murakami. “However, the old system was mainly based on CGI and lacked expandability and stability. We decided to create a completely new system which incorporated a server.”

A combination of Fujitsu’s Interstage Application Server and Interstage Development Suite was the chosen solution for the following reasons:

• A solid development environment
• The ability to integrate solutions with any type of new technology, including XML
• The availability of vendor staff proficient in Java, CORBA, etc.
• Strong support from vendor

While Cardnet considered other products able to create servlet/JSP-based systems, it found that only Fujitsu’s Interstage Suite products were able to meet the four requirements listed above. “For us, no other product came close to meeting our needs,” says Mr. Murakami.

Speed, Security, Stability

Once Cardnet had selected Fujitsu for Net Debit’s development environment and server technology, the system was put together in record time. “The completion date for the new system was set for September 2001,” explains Mr. Murakami. “However, the development work began in April, and by the time we had finished our project plan, only three months remained to complete the development of the new system.”

“Recycling of Java components contributed to increased development productivity,” says Mr. Murakami, adding, “This project was completed with cooperation from Fujitsu, and owes its success to a number of the company’s talented engineers.” The high performance of Fujitsu’s Interstage Application Server also played a strong role in the system’s success. Financial institutions and member stores require short response times for exchanging online data. An “8-second rule” ensures that customers are not kept waiting. That 8 seconds includes the time required to complete the Internet connection, which leaves the service only 1 or 2 seconds to process the transaction. “Interstage Application Server meets our customer requirements by completing transactions within the set response time, with minimal customization,” notes Mr. Murakami.

Net Debit allows card holders to draw directly from their accounts to make payments, using the ID and password supplied to them by the online banking service of their financial institution. Therefore, protecting such customer details as card numbers, IDs, and passwords between the three parties involved is of the utmost importance, and only optimal solutions are acceptable. The secure socket layer (SSL) and 128-bit encryption capabilities of Interstage Application Server provide the essential security.

Mr. Murakami states that stability is also of prime importance to Cardnet’s clients. For example, “As JCB deals with other major credit card companies that license its brand, the system’s stability is crucial,” he says. Also, because transactions are not limited to normal business hours, e-business requires constant availability of service. The maintenance plans and batch processing must be designed to prevent system failure. “The latest enhancements to the application server provide consistent service delivery even during maintenance procedures,” Mr. Murakami says. “Fujitsu’s Interstage Application Server provides a greatly improved service not only in its resistance to obstacles but also in its quality of maintenance.”

Looking to the Future

Cardnet customer JCB is planning to successively introduce services that utilize the new system infrastructure. “JCB is the only credit card company in Japan that is recognized internationally, and it provides licenses to other Japanese credit card companies,” says Mr. Asai. “As the leading company in our market sector, we strive to offer our customers highly advanced services.

“It is widely believed that the credit card industry mainly uses a B2C model,” he continues. “However, it is also possible to implement a Business-to-Business (B2B) model using the same method. As JCB already has proven experience with issuing cards on behalf of corporations, we actually are in the B2B market.” In the B2B environment, Web services utilizing XML, UDDI, and SOAP are currently attracting attention. From this perspective, the ability of Fujitsu’s Interstage Application Server to adapt quickly to new environments is invaluable.

Mr. Murakami asserts that Fujitsu’s ability to partner with its customers also plays a role. “Fujitsu excels in its ability to manage projects, which has greatly assisted us to establish our new system. We expect to receive the same dedicated support from Fujitsu in the future.”