EDI (Electronic Data Interchange) is a system in which companies exchange business data such as orders and invoices electronically, using a standard format agreed in advance.
Buyer's system creates the order data
Convert to the agreed format
Send it to the partner over the network
Seller's system loads it automatically
The receiver can process the data as it arrives, with no retyping.
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Instead of paper slips or faxes, the receiving system reads and processes the data produced by the sending system as it is. This cuts retyping and copying errors, and speeds up the paperwork from ordering through to invoicing.
AnalogyIt is like agreeing with a partner to use the same form layout, so any form that arrives can be fed straight into a machine for processing.
How to rememberShort for Electronic Data Interchange. "Interchange" means swapping back and forth, so picture the swapping of orders and invoices done as electronic data.
Exam points
ExamEDI is a system for exchanging transaction information such as orders and settlement details electronically with partner companies over a network. For the exchange to work, the companies agree beforehand on the data format and the transmission procedure.
EFT (Electronic Funds Transfer, 電子資金移動) is a system that moves money itself from one account to another over a network, without cash or paper cheques.
Bank transfers, automatic debits for utility bills and salary deposits are everyday examples. What actually moves is not banknotes but the balance figures held on financial institutions' computers.
AnalogyRather than carrying cash over in a bag, the money flows down a line into the other person's account.
How to rememberF is for Funds and T is for Transfer: just as the name says, a technique for moving money.
Exam points
ExamPaying by debit card (デビットカード), where the price is taken from your bank account the moment you pay in a shop, is also a kind of EFT that moves money over a network.
Mix-upEDI carries business data such as orders, while EFT carries the money itself.
Cashless payment (キャッシュレス決済) is an umbrella term for all the ways of paying without notes or coins.
Cashless payment
Prepaid (load money first)
e.g. prepaid electronic money
Pay now (from your account as you pay)
e.g. debit card
Pay later (billed together afterwards)
e.g. credit card
Cards, QR codes on a smartphone, IC cards: whatever the method, anything that avoids cash belongs here. Sorted by when the money leaves you, there are 3 kinds: prepaid, where you load money first; pay now, where the price is taken from your account as you pay; and pay later, where you are billed together afterwards.
How to rememberCash plus "-less" (without). It names a condition, "no cash", rather than any one method, which is why it is an umbrella term.
Exam points
ExamA debit card (デビットカード) is a pay-now (即時払い) method: the price comes off the balance of the linked bank account at the moment you use it.
ExamWith a credit card (クレジットカード), the card company pays the merchant (加盟店, a shop that accepts the card) on the user's behalf, then later bills the user for the amount spent and collects it.
Electronic money (電子マネー) is a means of payment that records monetary value as electronic data on an IC card or smartphone and pays with that data.
It is one form of cashless payment, and the typical kind is prepaid: like a transit IC card, you pay from a balance you topped up beforehand. You just hold it over a reader, so small payments are over in a moment.
AnalogyPrepaid electronic money is like an electronic purse you fill in advance: each purchase empties it a little, and when it runs dry you fill it up again.
How to rememberThe Japanese word for topping up, チャージ, comes from "charge", as in charging a battery: with the prepaid type, you fill it first, like a phone battery, and then use it.
Exam points
Mix-upPrepaid electronic money (電子マネー) deducts the price from a balance you loaded beforehand, while a debit card (デビットカード) takes it from your bank account at the moment you pay.
Internet banking (インターネットバンキング) is a service that lets you carry out banking such as transfers and balance checks over the Internet from a PC or smartphone, without visiting a branch counter or ATM.
You can use it anytime and anywhere, but a stolen ID or password could lead to fraudulent transfers, so identity checks are tightened with measures such as one-time passwords. Once the user orders a transfer, the money itself is moved by the EFT mechanism.
AnalogyIt is as if the bank counter had moved into the smartphone in your hand.
Account aggregation (アカウントアグリゲーション) is a service that gathers a user's account information from several financial institutions into one app or screen so it can all be checked together.
A household budgeting app, for example, shows bank balances, holdings at a brokerage and card statements side by side on one screen. Users can see the whole picture of their money without logging in to each institution separately.
AnalogyIt is like an agent who collects the statements arriving in mailboxes all over town and delivers them to you in a single box each day.
How to remember"Aggregate" means to gather together and "account" is a bank account; the one who looks at the gathered account information is the user, to see the whole picture of their own money.
Exam points
ExamName-based consolidation (名寄せ) is the work a financial institution does to group one customer's several accounts under that customer and manage them in one place. Account aggregation (アカウントアグリゲーション) is a service for users to survey their own assets, so the purpose is different.