June 12, 2018
Tokyo- Earnest efforts are under way both in the public and private sectors in Japan to promote cashless payments ahead of the 2020 Summer Olympic and Paralympic Games in Tokyo.
The use of credit cards, electronic money and other cashless systems account for 20 pct of all payments by consumers in Japan, compared with 40 pct to 60 pct in the United States, European countries and China. The government and private businesses consider it essential to substantially reduce Japanese society's reliance on cash for payments in order to stimulate spending by the influx of foreigners expected to visit Japan on the occasion of the international athletic events.
The long-rooted custom of using checks for payments in North American and European societies meant that they smoothly and quickly embraced credit cards and other cashless means of payments. In Sweden, where the transport of cash is difficult in wintertime, most people are said to use a smartphone-based payment system called Swish, while an increasing number of stores no longer accept cash payments.
In China, mobile payments based on quick response, or QR, code are widely practiced, due to widespread counterfeit money problems.
Cashless payments are limited in Japan, against a backdrop of easy access to automated teller machines and the rare occurrence of cash thefts and fake bills.
But the social cost of handling cash is huge. Related expenses, including the management of ATMs and labor costs at retailers, total an estimated 8 trillion yen, according to Mizuho Financial Group Inc.. A substantial increase in cashless payments would create economic benefits of 10 trillion yen, through such consequences as streamlined operations and stimulated consumption, Mizuho said.
Falls in the cost of managing cash would be a boon for financial institutions at a time when they are struggling with weak earnings amid continuing rock-bottom interest rates. Cashless payments also free consumers from carrying much money in wallets.
In addition, analysis of big data on payments by consumers would be helpful for developing new products and services.
In April, the Ministry of Economy, Trade and Industry compiled a set of proposals featuring a hike in the share of cashless payments to 80 pct of all account settlements in the future. Cashless payments would "lead to unmanned and labor-saving stores," for which there is growing need in a Japanese society with a dwindling population, the ministry said.
The financial industry is stepping up efforts to increase cashless payments. Mizuho, Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Groups Inc. have agreed to unify QR code specifications for cashless payments. The trio hopes to prevent different specifications from causing inconvenience for stores and consumers.
The top three megabank groups are calling for regional banks and other smaller financial institutions to join them. "Ideally, we should achieve the widespread use of QR code-based payments," Mizuho Bank President Koji Fujiwara said.
In a related development, by 2020 retail giant Aeon Co. plans to introduce 100,000 units of a machine that automatically processes payments when credit cards are held over it. Jiji Press
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