The government will launch a smartphone-based rewards program in 2020 using national identification My Number cards, as part of measures to mitigate the impact of the consumption tax hike next month, sources close to the matter said.
The government is considering providing 5,000 yen worth of points to spend at stores across Japan to consumers who load 20,000 yen in their account for smartphone payments, starting in October next year, the sources said.
There will be no income restriction for applicants for the program and details of the framework will be disclosed soon in an upcoming Cabinet meeting on the promotion of digitalization of public administration.
Some municipalities in Japan offer similar rewards programs to spur their local economies and the government initially considered using their systems. But the plan was scrapped as their programs are available only within their own areas, not nationwide.
The new program that is expected to cost several hundred billion yen will follow another measure to give rebates for cashless payments at small shops from October to June next year, for which the government set aside 279.8 billion yen. The consumption tax will be raised to 10 percent from the current 8 percent from Oct. 1.
The government will look into the feasibility of bringing forward the start of the rewards program to July 2020, in time for the Tokyo Olympics and Paralympics beginning late in that month.
Partnering with major mobile payment operators, the government will devise a system that will require consumers to first apply for a My Number card to be used as an ID for an account to open on the program's website.
The government is in the midst of efforts to boost the issue of My Number cards, with such cards having been issued for only 13.9 percent of the population as of Aug 22. The card was introduced in 2016 as part of Japan's new social security and tax number system aimed at simplifying administrative procedures.
More mobile settlement services are becoming available in Japan as companies such as Rakuten Inc. and Line Corp. have been offering smartphone-based payments using QR codes and other methods.© KYODO