Jiji PressTOKYO (Jiji Press) — 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 percent of all payments by consumers in Japan, compared with 40 percent to 60 percent 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, codes 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, according to Mizuho Financial Group Inc. A substantial increase in cashless payments would create economic benefits of ¥10 trillion, 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.