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Japan slowly buying into cashless future despite widespread misgivings

44 Comments
By Su Xincheng

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Why so absolute? Totally cashless? Increasing it from 20-40%, sure or even more, but cash should always have a role, as countless disasters have disrupted the electricity grid. Electricity is a nice luxury, but it is not almighty. My money should not depend on a system that powers everything but that can fail when least expected.

19 ( +19 / -0 )

they'll never be a totally cashless society. cash has a role always will

8 ( +8 / -0 )

Realized halfway thru the article that the paypay ad on top of the page is part of the article. not a website ad

12 ( +12 / -0 )

Noticed some major changes. Banks no longer accept checks for deposit. The drive from banks are internet banking so they reduce or eliminate the numbers of ATM's which are very expensive to service and maintain. Cash is the only currency during a major disaster.

6 ( +7 / -1 )

I've always been surprised by how behind Japanese banks and business dealings are. I recently sold then bought properties in the UK without every having to go there to sign anything, let alone handing over cash.

In contrast, buying and selling properties here in Japan still involves handing over wads of cash and multiple signings (hankoing) of copious amounts of documents.

6 ( +6 / -0 )

Banks no longer accept checks for deposit. 

As far as I know, the USA is the only developed country that still uses checks. I always found it odd, and incredibly inconvenient and expensive to receive a check from the USA here in Japan. If it's less than $100, it's hardly worth the trouble of cashing. Cash is great, but checks are weird. They are basically a paper voucher for an electronic payment. Why use the paper at all? In that regard, the USA banks are as backwards as Japan.

I hope we will see a revolution in currency and finance in the near future. Preferably money that doesn't depend on nations or banks to back it up.

5 ( +5 / -0 )

"Despite its reputation as one of the homes of forward-thinking technology, Japan remains generally reluctant to move in a cashless direction..."

Actually, Japan is not forward thinking at all when it comes to tech for themselves. They certainly come up with some of the most advanced, reliable, and flat out best tech there is on the market (that is dropping, though, through lack of forward thinking and innovation), but they tend to export the tech before utilizing it here in many cases. Hong Kong had the Octopus electric card system for riding the trains and subways more than a decade before JR introduced the first ticket gates with electronic money tech, but the Hong Kong devices had tech made in Japan. Korea also had it way before Japan did. Heck, you STILL have to get your JR rail passes and seishun 18 kippu hand stamped by staff to use. They refused Apple Pay while most other countries had it already, and it is still limited to one company being able to use it for rail (JR East/Kanto). You are extremely hard pressed to find any shop that will let you use debit (bank card) so you don't have to carry around $2000 cash if buying a computer or an airline ticket, and most places still won't let you use credit cards even (and those who do limit it to specialized "HIS SkyWalker Visa" or "Izumiya Visa" or what have you).

Once they start, though, and get over the borderline psychosis over change, things spread pretty quick, and often with advantages. I remember how slowly smart phones spread when introduced (in fact, "smart phone" is still synonymous with "iPhone" here), resulting in companies having to offer plans that were way better in other countries (packet-houdai), but then spread like wild fire, with companies that initially refused the tech complaining they did not have the right to because other companies dared to take the first step.

Another major disadvantage of the whole cash thing here is travel overseas, and it's a major reason the Japanese are targeted for petty theft. The pickpockets/bag snatchers in major cities see that generic Louis Vuitton bag get off the tour bus with the Nikon camera and you know there's about 2K or more in there, cash.

1 ( +4 / -3 )

As far as I know, the USA is the only developed country that still uses checks.

All EU countries still use checks. Brother in Italy with a checking account. Brother in London with checking account.

Some American companies, like in insurance will only issue checks and will not do wire transfer. I don't have an American bank account since I'n not American and not living there. I received a check for $3500 which cost ¥5,000 to process. But from the end of May no Japanese bank will deal with checks, only wire transfers.

0 ( +2 / -2 )

I see PayPay everywhere. But why would I want to use that when I have Suica, Pasmo, aU Wallet, Apple Pay and more? And have already been using them for years here? The article doesn’t even mention that tons of others abound and there are a plethora of people already using their eMoney cards or phones to pay for goods without cash. Just the newcomers.

I used to say that Japan was a cash society; and it was. To a great extent we still use cash a lot more than other countries. And we do not use checkups here, thank goodness (Canada still does, too, btw). But why does using cash have to be seen as a “problem of Japan”? Besides, there have been tons of options for many years to use e-Money. When NA was stuck on debit cards, Japan was further advanced with our Quo Cards, and prepaid toshokaado, and then came Suica.

Elderly people have have trouble with new technology in ALL societies, so we should not base our advancement on their use.

2 ( +3 / -1 )

The last time I processed a check here it was about 5000 yen as well, and it took 2-3 weeks to clear. A terrible system.

1 ( +1 / -0 )

All EU countries still use checks. Brother in Italy with a checking account. Brother in London with checking account.

I think you are confused about what checking account means. Usually you don't need checks to use a checking account at all. In fact most EU countries where you can have a checking account will only allow accessing your funds via ATMs or electronic debits.

2 ( +2 / -0 )

The UK still uses cheque a and convenient it is too!

I’m all

for keeping cash and will pay for highways here in cash instead of using ETC unless there is a substantial discount for it....

0 ( +2 / -2 )

Cash is king. There is no way to properly describe the sensation, the feeling of counting bills of money, one by one in your fingers. Cash in hands, cash in the pocket or safe means security. Of course there are risks. Here in Brazil there is a big movement towards electronic payments, cashless society. Not only by large retailers, but also, by single professionals. Several fintechs are coming to Brazil. Street market sellers are adopting debit and credit cards machines to accept payments, a survival issue in a very competitive market. Large banks are struggling with the newly arrived financial startups. May be this occurs in Japan.

-1 ( +3 / -4 )

The last time I processed a check here it was about 5000 yen as well, and it took 2-3 weeks to clear. A terrible system.

Well I agree but the problem myexperience wasn't at the Japanese end but the American insurance which refused to use wire transfer. I have four Japanese bank accounts and all have wire transfer, internet bank.

0 ( +0 / -0 )

My missus and I are self-employed and are paid cash in the hand.Ain't no way we'd want that to change of course.

1 ( +1 / -0 )

Easier to avoid taxes with cash.

7 ( +7 / -0 )

As far as I know, the USA is the only developed country that still uses checks

Huh? I use cheques for nearly all my major financial obligations in Canada: property repairs or renos, accountant's fee, insurance payments, income taxes, etc. I tried to switch to electronic transfers but the providers refused to approve me as the respective financial institutions lacked agreements or otherwise don't recognize each other. They also rejected my Japanese postal code. LOL.

These days, just use paper if you want convenience and no hassles.

2 ( +2 / -0 )

Easier to avoid taxes with cash.

Yup! And that's why the government wants to go cashless. Record every transaction. Tax every micro-transaction.

9 ( +9 / -0 )

@BBoCB

Record every transaction. 

Over half of my daily transactions are cashless. The Suica card I use is not connected to my identity. If it were, I'd use mostly cash. Nobody needs to know where/when/what I buy nor where I'm going when I use the train or bus. Comment: "Have something you're hiding?" Yeah, but why assume everything that's hidden is bad? The problem is prying pessimistic and paranoid people, not those that want privacy.

6 ( +6 / -0 )

Bugle Boy of Company B: "Yup! And that's why the government wants to go cashless. Record every transaction. Tax every micro-transaction."

Paranoid much? TIJ is 100% correct in that there is plenty of electronic currency that cannot be tracked, if that's what you're scared of. And I'm willing to bet that at the very moment you speak of the fear of recorded transactions, you will admit that you do furikomi. Meanwhile, you can still read quite often about the "unlucky" man or woman who had their bag snatched and had more than ¥1M cash in it on her way to put it in the bank or to give to staff as payroll. Not only no ability to track, and no trail, but no more money. Period.

-3 ( +0 / -3 )

cashless = less robbery

2 ( +2 / -0 )

Banks love people to use cards because, as the story eventually mentions, they skim off 3.25% of the value of the transaction. For retailers, it sucks because they need to increase prices by 3.25% or they are basically losing 3.25% of their already slim margin.

In some countries retailers are allowed to give a discount to anyone paying in cash but NOT in most. Most retailers who offer the discount for cash will see their electronic payment devices pulled by the banks.

Japan needs to pass a law that requires banks to provide an electronic payment devise and makes it illegal to pull them if the retailer offers a discount for cash.

8 ( +8 / -0 )

Electronic = security problems, identity fraud, con tricks etc., for much larger sums than any simple street robbery. The banks (and the police) will never be able to keep up with the fraudsters, the banks simply increasing their insurance policies against a growing criminal joyride.

5 ( +5 / -0 )

The problem I have with Cash-less... is the whole Security aspect and should my cashless payment system be compromised, what are my rights to Compensation for any illegal deductions ?

I have 0/zero trust of Apple... their Legalese basically disavows them from any claim above 50 US$. So on your Bike Apple.... Likewise for some other Tech. Companies offering similar Cashless payment systems.

At present, the only cashless device I sort of trust is the SUICA card - I can top it up with hard cash, it's not linked to my Bank accounts, and thus limits my risk, and should I loose it, I can cancel the card, hopefully retaining the balance.

So to me, it's not the "Tech" but the "Security" the two do not, clearly go hand in hand.

8 ( +8 / -0 )

...the Japanese government hopes consumers will eventually embrace the future, or even the present...

Thanks for the belly laugh, JT! A great way to start the day.

1 ( +1 / -0 )

The advantage of PayPay from inception through now is the 20% you get off any payments. Now is capped at ¥1000/transaction, but was ¥50,000. I’ve saved a lot so far. Can also double dip with T-points, bic points etc. You get nothing shopping with suica

0 ( +0 / -0 )

Was just home and now the rage is "tap", if your credit card is set up for it. You don't even have to swipe it, you just hold it over the reader and the charge is made to your credit card. But at the same time, I noticed lots of places selling or offering cases to keep your cards in so that nefarious types are not reading your data and stealing from your account.

Also, was watching that great fear mongering show "Every" and as they are want to were showing the dangers of cashless payments in China. Explaining how third parties were placing QR codes near the register and when you went to scan your phone, it was also scanning the other Qr code and the y then had access to your account phone etc.

I still can't understand why the debit card system is not regarded as the best and easiest. You swipe, the money comes out of your account, there is no interest or anything, easy peasy. And you only need one card. Here there are so many darn cards, Suica, Nanako, Waon, Edy, etc. Not convenient at all.

4 ( +5 / -1 )

I still can't understand why the debit card system is not regarded as the best and easiest. You swipe, the money comes out of your account, there is no interest or anything, easy peasy.

True, but you are handing control of your money to a 3rd party - the banks.

That's the appeal of cryptocurrencies, they remove the middleman (the bank), and let the people control their own money.

I'm looking forward to cryptocurrencies being more integrated into our societies.

1 ( +1 / -0 )

I respect one thing China did is make everything cashless with wechat pay and alipay: https://youtu.be/75AXINUL47g

Here it will take some time, because people are obsessed with physical notes.. And also cashless makes business obide and pay taxes, so there's no hiding.. And in Japan there's a lot of fudged taxes, hence why China was strict to make the country embrace cashless faster to avoid businesses avoiding taxes also and to track people's spending, purchases and also to resell the data to other companies. And that part of the business is in legal issues in Japan with privacy concerns.

-2 ( +1 / -3 )

I use prepay cashless forms of payment for most things (Nanaco, Line Cash, prepay credit cards, etc). But keep cash at home in case of an earthquake cutting power.

2 ( +3 / -1 )

I respect one thing China did is make everything cashless with wechat pay and alipay

Since you mention China, they are also a good example of why privacy is needed. With their new social point system, people lose basic rights in society (such as being banned from travel or being disqualified from decent jobs) when they lose points for behavior the govt wants to restrict. Say they want to discourage drinking or legal drug use. Each time you buy a beer, your score drops. Until you are persona no grata in your own country.

Think of the things that a government might not want you to do, but won't make "illegal." Donations to particular political parties, buying legal weed, watching porn, buying gold, drinking too much soda....

People think this will never happen here, but to one degree or another, it almost certainly will. Unless privacy is protected. Admittedly, with facial recognition and security cameras almost everywhere, and your phone tracking your every movement - there won't be much privacy left even if we still do have cash. But the potential for abuse is massive, and on a scale never seen before.

6 ( +6 / -0 )

Cash benefits regular people.

Cashless benefits the oligarchs who can demonetize you like that because you have the wrong point of view.

Long live cash!

4 ( +5 / -1 )

Commanteer

I agree with you on that. Companies like Money Tree and others that make their cashcow off of reselling private data is the lowest of lows. Let's not forget Google and others.. Hence why there's no other competitor to them, whereas in the 90s there was way more choices..

Additionally if youve seen the recent Apple keynote, they're now making their own credit card via their Apple pay, which will defiantly be recording and reselling your data.

However a company we are working with are not the type to resell data and are helpful to integrate all your payment of bills or to transfer money abroad. Hence why others damage the image of cashless, the ones that corrupt the service by reselling your data I.e Google and Co and others that actually want to make payments easier. Credit cards can be broken or stolen or hacked. Whereas cashless is more encrypted. Eitherway, if you tend to use credit cards more so then cash, you'd be easy to go to qrcode/cashless apps. Just avoid the usual suspects of data theft: Google pay, Apple pay, line pay, Rakuten pay, there's a better safer service coming soon.

0 ( +0 / -0 )

Paypal in a sense was the first cashless transfer without qrcode payments, so if your paypal, stripe, or credit cards, how is it any different to a cashless qrcode based app?

-1 ( +0 / -1 )

When paying in person, cash will always be best. What you purchase and when is your business, not anyone elses who collects data to sell to other companies. At least twice last year in Australia, banks went offline for hours at a time for card purchases leaving shoppers unable to buy goods and shopping unless they had cash on hand to do so. While this does not happen often, it does happen. When it happens it is a disaster. Cash always comes out on top for me.

1 ( +3 / -2 )

When you withdraw from the ATM machine, your bank already tracks your withdrawal and if you use your credit card the companies track what you do, the large monopolies like google, apple, rakuten etc are to blame for their agendas to resell data, as mentioned other new companies refrain from doing so if you read their privacy policies.

-1 ( +1 / -2 )

Japan is still a country afraid of change. It always seems to be the slowest and last to adopt any major changes or upgrades. It was only three years ago they banned the use of Windows XP in government offices, but many still use it in an offline set up. The strangest thing about it is, they are worried about trouble with transactions, so they prefer to use cash. How many thefts and robberies are there in Japan involving huge amounts of cash unnecessarily kept in homes, shops and offices? Japan's love affair with cash will be difficult to break. At the very least they should make taxis cashless.

4 ( +5 / -1 )

Not to mention a large amount of counterfeit crimes that occurs here by the yakuza, yakuza cant counterfeit cashless..

0 ( +1 / -1 )

Aside from China, even Cairos new capital is going completely cashless:

https://scoopempire.com/egypts-new-administrative-capital-plans-to-apply-electronic-payments-only/

We need to keep up with tech advances, we are lagging

-1 ( +0 / -1 )

If Japan wants to be a tech leader it can't think like a dinosaur

2 ( +2 / -0 )

It is a matter of corporation domination.

I have been using for 20 years a bank card with 4 digit password in nearly all shops, now with embedded 30€ or so possibility to pay contactless. Fraud is something like 0,01% and reimbursed by law in any case if loss with password (exception : theft inside home family).

No stupid other card or means of payment necessary that steals your personal data (paypal,alipay, apple pay, whatever...)

Card is no fee for user if you have a salary or student, and no fee to get cash from machine except outside EU (less than 2% fee).

Wire transfer is free in € world and I have been able to pay cashless anyone in my country for over 20 years in fact...not instant pay though , between a few hours to 4 days before with small banks; but it is coming soon ! (I don't see much of a change because you have normally 99% commercial use of your bank card)

In Japan, so backward : shinsei bank proposed only a debit card. Does it do better nowadays ?

Suica is nice but system shoulf be in your card.

I don't wish all in one embedded in my keitai. As said, no electricity or dysfunction, you are naked !

0 ( +0 / -0 )

It strikes me that the grid can be taken down by not only geological but also political disruption. Luckily Japan is safer in the latter respect.

Innately averse to putting all my eggs in one basket, LOL.

0 ( +0 / -0 )

The classic J-corp way of thinking is this: When a customer pays with credit card we'll be charged X% transaction fee. Therefore we will lose money if we allow credit card payments.

They only make business decisions based on tangible facts, which is why Japan always lags behind despite having some of the best technology.

0 ( +0 / -0 )

During the period, cashless payment service operators will be required to cap their fees for such stores at 3.25 percent, lower than ordinary fees, in order to receive subsidies for the rewards program.

The elephant in the room. These operators want to take more than 3.25 percent every time money changes hands? Are they all run by ex-LDP bureaucrats?

It's bad enough that the government does whatever it can to devalue cash; now they want to make us all pay fees to middleman card operators too. I'll stick with my untrackable, no-fee cash, thank you very much.

1 ( +1 / -0 )

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