Osaka, Japan's third-largest city with 2.6 million inhabitants will be the first to offer the new program to its residents and tourists with the launch of the Osaka City Card in June.

The Osaka City Card is equipped with a contactless IC chip that will keep track of points awarded for purchases at participating city shops, amusement facilities and businesses, which customers can then exchange for attractive rewards. Loyalty programs have long proved effective at increasing customer retention and sales. By pooling points for all program merchants, consumers are given incentives to patronize local businesses and shop within the city.

JCB will be issuing the contactless IC Osaka City Card to applicants, providing POS terminals at merchant locations, building on the network of JCB credit card-enabled terminals already in place in many local businesses, as well as managing cardholder and merchant data processing.

Point program operations will be subcontracted to the Japan Point Anex, a joint venture established in 2001 by JCB with a number of other credit card companies and major retailers. JCB will also be providing telephone customer support to cardholders and merchants.

By using its existing infrastructure and expertise from issuing technology to customer support, as well as the POS and communications network already in place for its credit card operations, JCB can offer local governments and merchant associations a loyalty program with quick start up and low operating costs that can also promote the regional economy. JCB plans to aggressively market the new service to other cities and towns throughout Japan, and has set a target of 10 contracts and one million cards in the first year.

JCB also offers service customers the option of cards with an advanced dual-interface IC chip, allowing both contact and contactless access to a single chip that means the card can be used in a wide variety of applications. For example, in the future the Osaka City Card loyalty program could be combined with the KANSAI THRU PASS prepaid transport card, also contracted to JCB by the Osaka Municipal Transportation Bureau, as well as incorporating credit card payment functionality