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Japanese ramen restaurants under pressure from new yen banknotes

42 Comments
By SoraNews24

Ramen is easily one of the most enjoyable dishes in Japan, but for the many restaurants that serve it, it can be a stress-filled nightmare of existential threats. The newest such threats are coming in the form of industrialist Eiichi Shibusawa and educator Umeko Tsuda.

It’s because they are two of the faces that will grace the newest series of Japanese banknotes. These bills are entering circulation this year with revamped designs.

Screenshot-2024-04-23-at-12.20.36.png
Image: Ministry of Finance Japan

It’s well-known that Japan is the land of vending machines, which means that a change in the design of bills will also require an overhaul of each and every machine to update its bill scanner. The creation and installation of all these scanners can be extremely costly, so announcements of new bills are often met with consternation from machine operators.

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Image: SoraNews24

These are often used by independent restaurants since they can reduce labor costs but are also vulnerable to the costly updates. Of course, these kinds of upgrades come with the territory and are to be expected, but the timing of this particular change could prove devastating for a lot of restaurants, ramen restaurants in particular.

The main reason is that the ramen restaurant business is extremely competitive; one only needs to check a Google map of restaurants in their area to see just how competitive it is. It is said that under normal circumstances, about 80 percent of ramen restaurants go out of business in the first three years.

In addition to the debilitating effects of COVID-19 on restaurants, we’re now experiencing skyrocketing food prices which are said to have more than doubled the cost of making a bowl of ramen. Despite the rising cost of ingredients, ramen restaurants are under pressure to keep prices the same due to the aforementioned competitiveness.

To have to pay upwards of 1 million yen to upgrade their ticket machines while dealing with all the other struggles will likely knock out a large number of restaurants in one fell swoop. According to one restaurant manager, it would take six months of selling 100 bowls a day to cover that cost. Some local governments like Katsushika, Tokyo have begun offering subsidies to cover part of the costs, but restaurant operators would prefer 100 percent coverage since this currency change was unilaterally the government’s decision.

There’s a pretty much zero percent chance of these new bills not coming, and doing nothing while waiting for government subsidies to come would be a really bad idea. So, in all likelihood, there will be a game of chicken between restaurants’ pricing, with many falling by the wayside either from raising prices and losing customers or keeping prices low and losing money.

The best thing we can do as lovers of ramen is to go to our favorite places as much as possible to help them weather this perfect storm of economic woes.

Source: TV AsahiHachima Kiko

Read more stories from SoraNews24.

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-- Ramen and dekotora come together at this restaurant in Japan

© SoraNews24

©2024 GPlusMedia Inc.

42 Comments
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I hope the old vending machines can be reprocessed in the same way that this story gets recycled every time new banknotes are introduced.

7 ( +12 / -5 )

For quite some time, I have been going on and on about Japan's reluctancy to embrace contactless credit card payments everywhere.

See where this thinking has led them?

First they ran out of IC cards meaning people coming into the country are either forced to buy iPhones or domestically marketed Japanese smartphones for convenient payment.

Now everyone in every corner of Japan will have to acquire new vending machines to handle the new banknotes. Hopefully they get it right this time and allow for contactless card payment as well? After all, we are literally in 2024.

The problem with clinging to the ways of the past, as they so often do here, is that eventually some presently unknown factor or variable will change, and when that time comes, everything needs to be updated, and it's harder to do that all at once than implementing new technology and changes little by little every year.

Time's up for Japan and this cannot keep happening.

-12 ( +6 / -18 )

that picture makes me hungry.

5 ( +6 / -1 )

Surely installing a PayPay terminal or going the whole hog and facilitating card payment is easier than trying to convert an old analog machine. Incidentally, competition is great to some extent, but when there are dozens of very similar businesses in close proximity, it's time to have a serious think about changing business. If you want to be in business, then you have to have some business savvy.

-1 ( +5 / -6 )

Those Wondering why stick with these machines, we'll go to western countries that are now all nearly cashless and see how much it costs to eat out.

PayPay, debit, credit, etc...all cost the businesses at least 3% and at the profit margins these places fun on, 3% is a lot!

My business was cash or bank transfer, with the changes after COVID I got a POS (point out sale) system expecting only a few to pay that way.

Unfortunately 80% now pay that way meaning nearly all sales cost me 3.5% or more in service fees.

So I raised my prices!

The same will happen if these places change from cash to offering cashless options.

13 ( +15 / -2 )

wolfshineToday  07:28 am JST

For quite some time, I have been going on and on about Japan's reluctancy to embrace contactless credit card payments everywhere.

so old people don’t want contactless. Some prefer cash, as they can budget better. Credit cards are a debt trap. And some can’t get credit and some don’t want credit cards. And what Happens when the glitch comes? Everyone is running for “cash”.

cashless is fine but also cash is great too. Stop talking cashless down everyone throat. Also people tend to overspend when they don’t use cash and that’s proven by research by the very same credit card and cashless companies.

14 ( +18 / -4 )

if I was a struggling ramen seller I would keep the old machine and anyone paying with a new 1000 yen note handed straight to the ramen master gets a ramen

They probably know that if they moan loud enough, the local government will pay for a new terminal.

-1 ( +3 / -4 )

Is Japan STILL a cash-based society? It's 2024!? Hardly ever see cash being used in other countries now.

-16 ( +3 / -19 )

100 bowls of ramen a day for 6 months to make 1M - 2M yen? That must be the cheapest ramen on the planet!

1 ( +4 / -3 )

It was all cash when I was there and I preferred that. Easy transactions and quick, too. Credit cards are great but it was always easier for me to budget my cash than to tangle with my credit card balance. That was me back then so maybe another better way has passed me by. I just preferred cash.

7 ( +9 / -2 )

For the ones saying what Japan isn't a cashless country yet, the answer is simple. The ridiculous greed of the Japanese Banks. While in the other countries banks are charging between 1% to 3.5% when using a credit or debit card, in Japan already is between 5% to 10%.

For small business this callous greedyness is the reason why they don't want to adopt this, and only use cash.

Is the sad truth.

-6 ( +4 / -10 )

METATTOKYO

Today 09:19 am JST

Is Japan STILL a cash-based society? It's 2024!? Hardly ever see cash being used in other countries now

Yes! Now try and find a meal in those countries at a price are reasonable as in Japan!

Good luck!

And the revolution has started, with Canada court decision that retail businesses can add the credit card and debit card fees to the customer's payment, many USA states have also changed the laws to permit putting the fees on the customer.

So, now except a 3% on your credit card or debit card e-money, etc .. payments in more and more western countries!

0 ( +5 / -5 )

Japan is country where cash is king.

many of us knows that well.

3 ( +4 / -1 )

when it comes to accepting money, they’ll figure it out pretty quickly.

the sky isn’t falling.

10 ( +10 / -0 )

DanteKH

Today 09:41 am JST

While in the other countries banks are charging between 1% to 3.5% when using a credit or debit card, in Japan already is between 5% to 10%.

Where did you get that information?

Not a single credit card or POS system even came close to 5% as the merchant's fee when I chose the system I have.

The highest fee is Dinner's at 3.75% all the rest are 2.5% to 3.2% and this was a cross the board.

Even a direct deal with my bank wouldn't have come near 5%.

4 ( +8 / -4 )

if I was a struggling ramen seller I would keep the old machine and anyone paying with a new 1000 yen note handed straight to the ramen master gets a ramen

Simple enough solution indeed.

4 ( +5 / -1 )

Gaijinjland

Today 09:19 am JST

100 bowls of ramen a day for 6 months to make 1M - 2M yen? That must be the cheapest ramen on the planet!

Try it again.

According to one restaurant manager, it would take six months of selling 100 bowls a day to cover that cost

It doesn't mean 100 bowls a day he make ¥1 million in 6 months!

It means out of his net after all other expenses he would need 6 months to cover the extra cost.

The profit margin on a bowl of ramen is very low and requires volume to make money!

1 ( +4 / -3 )

What a bizarre headline with advertising for ramen shops. Everyone will have this issue and just with the new 500 yen coin when it came out just don’t use them. Who’s going to use 10,000 yen in a ramen shop. Get a life and get some smaller change for these mom and pop shops. Usually when I use a 10,000 notes I say sorry in Japanese, as do most of my Japanese friends, with small purchases.

2 ( +5 / -3 )

Ps. The photo shows tokyo downtown prices. Ramen even around me is 800 yen max. Places in shinkuku are 500 yen. Quite pricey that chain.

3 ( +3 / -0 )

The most annoying thing in the west is the cashless system now!

I want a $1 candybar and instead of just giving $1 and walking out, no I have to bull out my phone or credit card to pay a silly $1 and now in many places the merchant fee is charged to the customer, so my $1 candybar is now $1 and 3¢ on my credit card.

If traveling and using a Japanese credit card, then I get the exchange fees that are other not as good as some places I can exchange cash!

During the New year holidays I was in my home country, I wanted a coffee $3.50 credit or debit only, why?

I had the $3.50 in my hand but no way, I walked away!

0 ( +6 / -6 )

Just have a lot of small bills handy and put a sign on the machine directing customers with new bill to pay at the counter. More time-consuming but cost effective. If you have two machines, maybe replacing one won't be such a big dent in the wallet. Put signs on each one to let people know which one can accept the new currency. On a related note, even a big company like Keikyu has machines that still don't accept new coins YEARS after they have been introduced.

4 ( +4 / -0 )

リッチ

Today 10:27 am JST

What a bizarre headline with advertising for ramen shops. Everyone will have this issue and just with the new 500 yen coin when it came out just don’t use them.

The tech behind adjusting for new coins is far simpler, generally just an adjustment to size and weight is involved.

Bills are a very different story, these require far more sophisticated technology as they involve far larger sums, someone using a fraudulent ¥500 coin, (like happened years ago when people realized a Korean coin of lesser value passed as a ,,¥500 coin)

Passing a ¥5,000 or ¥10,000 fake is a far bigger loss!

New bills usually means a complete changing of the scanning mechanism.

Often coupled with other hardware and software updates.

2 ( +4 / -2 )

No need machine then. Chance to communicate with customers,

6 ( +6 / -0 )

its 2024.

its time to be contactless for payments.

what is deal?

go to eat ramen pay with contactless card problem solved.

in Australia for example its very common,why Japan is lagging behind as high tech country???

-4 ( +1 / -5 )

UAfan

Today 11:04 am JST

its 2024.

> its time to be contactless for payments.

> what is deal?

> go to eat ramen pay with contactless card problem solved.

> in Australia for example its very common,why Japan is lagging behind as high tech country???

Can you find a decent Ramen in Australia for ¥800 or better ¥680?

Just to give a cost difference that is more or less universal!

A Big Mac combo meal the same size in Tokyo Japan and Sydney Australia

Tokyo approx ¥800

Sydney: approx $15 Aud (¥1,524)

What people don't realize, I that all that "convenience" of cashless, comes at a cost and in the end it is the retail customer that pays for it!

I would rather pay the ¥680 at my local cash only Ramen shop than ¥800 at some place that take cards!

5 ( +7 / -2 )

Many vending machines accept Suica, Pasmo and other similar cards for payment, why not ramen ticket vending machines?

1 ( +2 / -1 )

A Big Mac combo meal the same size in Tokyo Japan and Sydney Australia

Tokyo approx ¥800

Sydney: approx $15 Aud (¥1,524)

What people don't realize, I that all that "convenience" of cashless, comes at a cost and in the end it is the retail customer that pays for it!

I would rather pay the ¥680 at my local cash only Ramen shop than ¥800 at some place that take cards

Your argument is wrong cause they are 2 different countries. Even all McDonalds in Australia only accepts cash the price of the big Mac combo would still be much higher than Japan.

-1 ( +2 / -3 )

The tech behind adjusting for new coins is far simpler,

I'm not entirely sure that holds up, especially with older mechanisms the opposite may be true and we can actually observe that here.

generally just an adjustment to size and weight is involved.

Technically true (even if some machines also check the metal resistance), but the problem here may be a "logistical" one. Some machines only have one set of adjustments for each coin denomination. That's why quite a number of machines still to this day don't accept the new 500 yen coin: Short of getting a new mechanism they have to decide whether to accept the old or the new coin, but they cannot accept both.

Bills, on the other hand, must be checked electronically, they cannot possibly be checked purely mechanically. A software update of the machine will make it accept both the old and the new bill. The problem there may be availability and price of the software update.

2 ( +2 / -0 )

yoshisan88

Today 12:08 pm JST

A Big Mac combo meal the same size in Tokyo Japan and Sydney Australia

> Tokyo approx ¥800

> Sydney: approx $15 Aud (¥1,524)

> What people don't realize, I that all that "convenience" of cashless, comes at a cost and in the end it is the retail customer that pays for it!

> I would rather pay the ¥680 at my local cash only Ramen shop than ¥800 at some place that take cards

> Your argument is wrong cause they are 2 different countries. Even all McDonalds in Australia only accepts cash the price of the big Mac combo would still be much higher than Japan

No my point is correct!

Every single supposed "advancement" inevitably raises cost!

More regulations by government: more cost to the customer.

More equipment needed to run the business: more cost to customers.

More credit card use and debit cards means more equipment that will become obsolete even fast than these ticket vending machines: more cost to the customer!

I pointed out Mac because it shows how in Japan Mac needs to keep prices low in order to compete.

If a Ramen was ¥1,500 you would see Mac raising it's prices because it could!

As long as I can go into my local cash only "teishoku" get a full meal including Miso soup, rice, pickles, vegetables, the meat or fish of the day, free green tea all for under ¥800 the major chains need to remain at a competitive price point!

Once my local "teishoku" needs to buy equipment to run a POS system, install the internet just to use said equipment, pay service fees, etc ..then the prices go up, once that happens the snowball effect kicks in and the rest will follow.

My customers said they wanted to be able to use credit cards or e-money, so I got what was needed, now they complain I raise my prices!

I said, I have to pay for the equipment and the service charges for the " convenience" you requested.

3% may not seem like a big deal if looking at a ¥800 Ramen that ¥24 but if you think ¥100,000 that is another story that I'd ¥ 3,000 it begins to add up!

Credit card systems (POS) all have drawbacks, some have no deposit frees, other charge for making the deposit etc.. no deposit fee or next day deposit comes with higher rates, lower rates mean a deposit fees and or once a month deposit.

1 ( +4 / -3 )

wanderlust

Today 12:00 pm JST

Many vending machines accept Suica, Pasmo and other similar cards for payment, why not ramen ticket vending machines

Look at which vending machines accept cards!

You will notice they are large corporations owned ones and not individually owned ones.

Independent vending machines usually don't.

For a vending machine to take cards, it requires access to the internet, it requires a contract with a bank, POS, credit service, etc..these can be based on different contracts monthly fee plus low percentage of sales, or in high traffic areas no monthly fees but a slightly higher percentage rate.

Some ramen shops take e-money and cards, these are usually large chains.

So for an independent ramen shop to have a machine that takes cards they would need a machine compatible with the POS, bank, credit service they plan on using, if that service decides to raise their rates, the shop would have to either accept the rate hike or by a new machine compatible with a different payment service!

Example:

A machine that works with the PayPay POS will not work with Rakuten, Line, Square POS and a machine that works with each one will not work with the others!

1 ( +4 / -3 )

For those all saying japan needs to go contactless. NO WE DONT. And there is most certainly a cost, and that I can promise you it is to the consumer or the shop down the line, who will pass that on to the customer in turn.It most certainly is not the CC or bank or app provider. This is just about financial services. Seriously! Nobody said before the smart phone “oh we must all and use a cc or a debit card. That’s how people get into debt. You may be ok, but what about people with learning difficulties,? How about people who can’t control their spending? How about those with debt issues? People with certain problems?Not your problem I guess. What happens if your phone is cut off? Or broken? What about price discrimination? We can’t just rush around buying another smart phone because you like cashless or force some 80 year old widow or a blind person to buy something on the internet to get a discount.which was a problem!

1 ( +3 / -2 )

Banks are greedy but at the same time one can't have the cake and eat it.

With next change of notes, if cashless, the ramen shop won't have to change anything.

Using cash is dirty, make you lose time and costs a lot of primary resources.

I love cash but it is not the future...

And the main question is why isn't there competition between bank credit card systems.

By the way, visa system costs less than Mastercard to the seller.

-5 ( +0 / -5 )

The article doesn't mention "cashless". Some posters go off-topic. The issue is the cost of updating 4 million vending machines to accept the new banknotes.

I pay cash for all my off line sales.

5 ( +5 / -0 )

Jonathan PrinToday  01:35 pm JST

Using cash is dirty, make you lose time and costs a lot of primary resources.

cash is dirty so that’s a reason to scrap it. So we might as well scrap door handles, toilet seats, bud seats. Bacteria is all around us and it’s shown to actually help us in way more ways. No doctor has ever or will ever prescribe “go cashless” to a patient. Unless they have dis-calculus

I love cash but it is not the future...

they can both be in todays world and tomorrows world. Maybe in a 100 years.

And the main question is why isn't there competition between bank credit card systems.

There is but ya know…… they do kinda go where the market goes and with money, you pay because you gotta pay, and building societies disappeared. And banks are their to feed the shareholders and to lend money to people who “ironically” have money. Not people who are disabled, unemployed etc.

By the way, visa system costs less than Mastercard to the seller.

I as a consumer don’t care which is cheaper as a system because I never see it when I hand over cash or my credit card. No CC says btw we charged you and extra 3% or 2.8%.

if it say 100 yen, I am happy to pay 100 yen, in cash, app, points or cc. But cash is psychologically more manageable. Nobody ever looked at their CC and said aaagh, yes I have 1500 yen in my credit card. But we have all done that in our wallets.

2 ( +3 / -1 )

Cash is king for me you see, oh yeah! Well, in usually have over 100000 on me at any time and my bank card if wish to take out some dough.

As Mr Antique stated these bleeding new changes always put some poor sod out of pocket, it makes me ruddy cross.

-4 ( +1 / -5 )

Jonathan Prin

Today 01:35 pm JST

And the main question is why isn't there competition between bank credit card systems.

I guess you haven't heard of PayPay, Line pay, Rakuten pay, and a myriad of new alternatives payment systems.

But they all come at a cost, it doesn't matter if the cost is lower than traditional credit cards, they have a cost and that cost ends up being added on to your cost one way or another!

As for cash, the seller keeps more, his cost stay lower and you end up paying less.

And that is why so many in government and big business are pushing for cashless, they are the ones that will profit, not the little business and certainly not the consumer!

-1 ( +3 / -4 )

The costs will cash are likely just as high. You have to keep a float and go to the bank during bank hours. The beauty of cash for a ramen shop is that noone asks for a receipt so you can hide most of your income. This will be ramen shop "common sense".

My Japanese partner in the tourism sideline I have hates cash and prefers people to pay with Square. He hates cash because it makes him go to the bank. The cost of the Square terminal was under 10000 yen. For the business we do, letting people pay in cash and sticking it straight in the ol' back pocket is not an option.

It should also be obvious but you cannot rob a ramen shop that takes cashless payments.

-3 ( +1 / -4 )

kohakuebisu

Today 02:57 pm JST

He hates cash because it makes him go to the bank.

ATM deposit everywhere!

have hates cash and prefers people to pay with Square. He hates cash because it makes him go to the bank. The cost of the Square terminal was under 10000 yen.

Not exactly!

The square terminal is not under ¥10,000 it is nearly ¥40,000 only the reader is ¥5,000 and you need a compatible smartphone, the app and pay 3% up each transaction and if you need any more than the basics then a ¥6,000 a month for plus, and more for the rest!

It also requires internet access!

Now compare that to these machines, no internet needed that is at least ,¥ 29,000 to 49,000 a month savings, then the 3% + fees on every sale, and in every case you need to physically enter the code or amount for the sale , meaning you are not serving or preparing the food during that time!

1 ( +3 / -2 )

Oops!

Now compare that to these machines, no internet needed that is at least ,¥ 29,000 to 49,000

That should be ¥2,900 to ¥4,900

0 ( +2 / -2 )

Is this article saying 1,000,000 yen per machine to so a software upgrade for the new notes? That seems wildly excessive. I've worked with coin acceptors and not acceptors, and having them updated to support new coins/notes cost closer to 5,000 yen per device, and that included shipping the device to have the upgrade done.

-1 ( +1 / -2 )

These are often used by independent restaurants since they can reduce labor costs.

These vending machines are used to prevent staff dishonesty.

0 ( +2 / -2 )

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