Japan on the way to a society without cash

In April 2018, the Ministry of Economy, Trade and Industry of Japan (METI) compiled a set of proposals that included increasing the proportion of cashless payments to 40 percent of all transactions by 2025 from less than 20 percent in 2016 , and 80 percent in the future.

In Japan, cashless payments are limited due to easy access to ATMs, the crime rate is low and counterfeit bills are infrequent, so people feel safe carrying cash. In addition, while many convenience stores and large retailers allow several payment tools, many small businesses only accept cash. Smaller establishments are reluctant due to the cost of processing credit card and electronic money transactions, and credit card fees can reduce their profits. Credit card rates can average 3.09 percent, according to a research company.

However, the government wants more consumers to conduct cashless transactions using credit cards, debit cards and e-money before the 2020 Olympics. The government and companies consider it essential to substantially reduce society's dependence on money. in cash to stimulate the spending of those who expect to visit Japan for the Olympic Games and other international athletic events.

The government's estimates using the electronic transaction rate of Japan in 2015 was only 18.4%, while that of China was 60%, 89.1% of South Korea, the United States and European countries exceed 50%

This would also "lead to unmanned and labor-saving stores" that are needed in a society with a shrinking population, METI said. The cost of managing expenses related to cash, including ATM management and labor costs at retailers, is enormous. A substantial increase in cashless payment should generate economic benefits.

The financial industry is already intensifying its efforts. The three major banking groups have agreed to unify the QR code (rapid response) especially for cashless payments and are asking regional banks and other smaller institutions to join them.

In addition, moving from cash to digital money will improve the transparency of money flows that will allow the government to collect taxes more accurately and efficiently.

TECNODEDSEC