Japan aiming to promote cashless payment services

May 2, 2018

Tokyo- Japan will promote public-private efforts to spread cashless payment services in order to help businesses, mainly local companies, reduce costs and tackle labor shortages, and to improve the convenience of foreign visitors.

In its "Cashless Vision," compiled in April, the Ministry of Economy, Trade and Industry set a goal of raising the proportion of cashless payments, including through electronic money and credit cards, in overall household spending to 40 pct in 2025 from 18.4 pct in 2015.

The ministry moved up the target year from 2027, which had been envisioned by the government's Council on Investments for the Future.

It plans to establish this summer a task force with banks, credit card companies and retailers to draw up specific measures.

Japan is falling behind other countries in promoting cashless payments. The cashless settlement rate in Japan in 2015 was far lower than the level of 89.1 percent in South Korea, 60 percent in China and 45 percent in the United States in the same year.

Japan sees an urgent need to promote the services in order to enhance the convenience of visitors to the country, with, for example, the number of users of such services having topped 600 million in China.

They are also expected to help small and midsize regional retailers better deal with their labor shortages.

According to a survey by Mizuho Bank, annual costs for handling cash settlements, including labor and transportation costs, reach as much as about 8 trillion yen, with retailers and restaurants, in particular, facing large expenses.

If cashless settlement services are not improved, foreign visitors to Japan will refrain from active consumption, and the country will lose sales opportunities worth 1.2 trillion yen in 2020 as a result, according to another estimate.

At the planned public-private task force, members are likely to discuss measures, including a subsidy program to help businesses cover some of their initial costs for introducing cashless payment terminals and registers, sources familiar with the matter said. Jiji Press