Japan as a Cash Society
Japan is a country that loves cash. Everywhere you look in the streets of Tokyo are ATMs, most of them in convenient stores. Also, people in Japan often use a cash card, which is different than a debit or credit card. What is a cash card? A cash card can only be used to withdraw or deposit money- so basically a debit card with less features. Furthermore, many shops in Japan will only accept cash, making it hard as the government tries to turn to digital payments.
Around 20% of consumer payments in Japan are made in cash in 2015, which is much higher than that of developed countries like the US, and left behind by cashless countries such as Sweden. Even one of Japan’s biggest competitors, China, has been ahead in the game with many users now using WeChat Pay and Alipay as an alternative to cash.
Japanese Government Pushes the Digital Market
However, not all hope is lost for Japan. Prime Minister Shinzo Abe wants Japan to head into a cashless society. On Japan’s official website concerning Abenomics, Japan plans to achieve 40% cashless payment by 2027. Even preparing for the 2020 olympics, Abe has already using blockchain and FinTech to digitalize the community. Even banks, once enablers for Japan’s love of cash, is changing. They have to compete with the new digital rivalry.
Around 20% of consumer payments in Japan are made in cash in 2015, which is much higher than that of developed countries like the US.
Why is cash so bad anyway and why are so many wealthy economies switching? Cash is an expensive form of transaction, costing Japan 2 trillion year every year. That is not all. Cash in society is also inconvenient and fosters an environment for crime. If you lose your cash, there is nothing you can do. However, even when someone swipes your card, you can call up your bank to replace it.
A Digital Solution
In Japan, point cards are a popular way to save money. For every 100 yen spent, you receive one point which is equivalent to one yen and can be used in a variety of places. Recently on TV and YouTube, ads have been playing of a Japanese woman trying to find her point card, but unable to because of the number of cards already in her wallet. Right after, the Google pay shows how you are able to have all the point cards stores right into your phone.
Apps like Google pay allow you to pay for products like a credit card and allow access to point cards. Commercials like these in Japan have increased.
LINE is also a promoted their digital payment method. Similar to China’s WeChat Pay, LINE Pay is a “secure and easy payment platform” for your phone. With 75 million active line accounts, LINE Pay has a big consumer base to tap into. It is completely free and easy to use. Even foreigners will feel the ease of use, as most of the process will be in English, and much easier than a typical Japanese card.
As a foreigner in Japan, utilizing convenient Japanese apps can save you time and money.
