Only 'two or three' people a week use the PayPay system at Katsuyuki Hasegawa's bike repair shop Photo: AFP
tech

In high-tech Japan, cash is still king

89 Comments
By Anne Beade

Once a pioneer in cashless transactions, Japan is now lagging behind as the world's biggest economies increasingly embrace electronic payments -- because its ageing population still prefers physical money.

Four out of five purchases are still made with cash in Japan, despite its reputation as a futuristic and innovative nation. In South Korea, some 90 percent of transactions are digital, while Sweden aims to be a cashless society as early as 2023.

But in Japan, where crime and counterfeiting is virtually non-existent so people feel more comfortable carrying cash, consumer response has been sluggish.

At Katsuyuki Hasegawa's bike repair shop customers are invited to settle their bills using PayPay -- a tie-up between Softbank and Yahoo -- using a QR code via their smartphones.

But only "two or three" people a week are using the service, Hasegawa tells AFP.

"In a place like this, everything is very slow. We get lots of old people who like to chat while getting out their money. They don't need quick transactions," says the 40-year-old shopkeeper. "Personally, I prefer cash. With PayPay, you don't keep track of your money.

With Japan becoming the first "super-aged" society with more than 28 percent of people 65 or over, it is harder to persuade consumers to take up new technology, according to Yuki Fukumoto, an analyst at the NLI Research Institute.

"The challenge from now on is how to motivate people" to change their habits, said Fukumoto.

This is a serious challenge in a country with more than 200,000 ATMs and where most small shops will only take cash to avoid high transaction costs.

Many were also put off when retail giant Seven & I Holdings suffered a hacking attack immediately after launching a new QR-code payment system and was forced to scrap the scheme.

Yet it was way back in the 1990s that Japanese firm Denso Wave developed the first QR codes now frequently used in cashless payments, while Sony has offered a chip used on public transport and for payments since the 2000s.

Payment cards for transport systems in Tokyo and other cities are also often used for small purchases from vending machines or convenience stores, but cash remains preferred for other transactions.

The Japanese government is hoping to seize on a wave of tourists expected to flood in for the 2020 Tokyo Olympics to double the amount of electronic payments to 40 percent by 2025.

It also plans to introduce a points system to partially reward customers paying by cashless means as a way to mitigate a controversial hike in consumption tax from eight percent to 10 percent from October.

Tokyo perhaps has an eye on the costs of such a dependence on cash, estimated by a Boston Consulting Group survey at two trillion yen ($18 billion) to maintain ATMs and transport money around securely.

Companies too are doing their best to promote a cashless society -- earlier in the year, mobile company Rakuten started "100-percent cashless" stadia for its baseball and football teams.

Akiko Yamanaka, who runs a chic restaurant called Koguma ("bear"), said a 10-percent discount introduced by PayPay for diners who settle the bill using their system had attracted several people.

"The more campaigns there are like this, the more people will convert to cashless," said the 54-year-old.

And Rakuten boss Hiroshi Mikitani is convinced that the future is cashless, even in Japan.

"One day soon, money as we know it -- notes and coins that we carry with us -- will be as outdated and collectable as vinyl discs are now," he said in a recent blog.

Nevertheless, he admitted that "security has to be improved" for this to happen, especially in the wake of the QR hack.

© 2019 AFP

©2019 GPlusMedia Inc.


89 Comments
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And I'm happy for that! As a Canadian who visits annually (since 03/2011) I love traveling the country with cash. I have, I must admit, used my debit card to access extra funds when I felt obliged to buy something unique (samurai swords are one example, crystal sculptures another). Please don't change.

11 ( +18 / -7 )

Cash is king in the UK too.

These sort of articles are nearly always presented as if Japan is so backwards they still using cash, whilst the entire world has moved on to God knows what!!!

Just like the odd "they still use fax" thingy.

Redoculus.

-12 ( +10 / -22 )

@Peeping_Tom, Nobody uses cash in the UK these days.

7 ( +15 / -8 )

I was talking about this a couple weeks ago with a friend of friend at the izakaya we were at and how recently some places in Tokyo were advertised as NOT accepting cash. He told me he and his wife always try to go "cashless". I asked what did he use, he told me, Edy, every time he goes to the supermarket he hands cash to the cashier, they "charge" his Edy card and he "pays" with the card, cashless!

I wanted to slap him upside his head!

12 ( +14 / -2 )

"@Peeping_Tom, Nobody uses cash in the UK these days."

Maybe you live in a parallel world; I live in London.

Lots, i.e. a LOT of people use cash over here.

-4 ( +8 / -12 )

Don't do it Japanese people! You will be in less control over your circumstances. In major economic, political, natural, or man made emergencies, you very well may be screwed. It may not be easy to have cash tucked away that you can get at to use as a life-line. That seems to be the case at least when I read up on Sweden. It's very INconvenient to use cash there. One's choice has virtually been cut to one.

Most of this push to convert is so big brother and banks can save money by not having distribute and track cash and government can tax it more effectively.

Don't you think banks will find more ways to charge you if you don't have cash as an option? What will you do when a major earthquake erupts, power goes out for a couple of weeks and access to cash is unavailable?

I sound like a nut, but we've seen in the past how fragile Japan really is and sooner or later in this generation or the next, disaster of some sort will strike. The question is will you be in a better position to act?

12 ( +17 / -5 )

Japanese still have concerns about privacy protection and the trustworthiness of banks and payment providers. How backwards! All the progressive people are busy jumping off the cliff.

9 ( +12 / -3 )

Cash usage is declining;

BUT

"However, cash isn’t disappearing anytime soon. A 2017 UK Cash Report by PYMNTS found that consumers in the U.K. still heavily rely on cash when it comes to payments. While the country’s share of cash decreased at an average of 1.54 percent per year between 2001 and 2016, it is expected that total use of cash will increase at a compound annual growth rate (CAGR) of 1.46 percent per year from 2016 to 2021."

https://www.pymnts.com/cash/2018/uk-cash-use-purchases-card-mobile-payments/

"My" firm deals with lots of paying clients; they'd rather pay CASH.

-2 ( +6 / -8 )

I wanted to slap him upside his head!

You need to broaden the definition of ‘cashless’.

For me, I simply don’t want to carry loose change. Or dig into my wallet to pay for things.

-9 ( +3 / -12 )

I maintain a bank account in the States. When I visit, almost everything is by debit. I'll sometimes use the "cash back" option at stores to keep a bit in my wallet just in case - stores seem to love that as it allows them to transfer their cash straight to the bank.

1 ( +2 / -1 )

just got back in yesterday after around 2 months in Canada.

I do notice glaring differences between the 2 countries in that Canada is alot more cashless than I remembered it.

For me, I simply don’t want to carry loose change. Or dig into my wallet to pay for things.

Im the same. But to each his own...

5 ( +7 / -2 )

But in Japan, where crime and counterfeiting is virtually non-existent

Pardon? Did they really just state this? How about the hundreds of ‘Ore Ore’ scams every year? How about the regular cash robberies at pachinko parlors? How about the hundreds of bag snatching incidents every year? How about the regular break ins to houses stealing cash stashes? How about the many robberies of shop owners taking their cash home? There has also been many cases of counterfeit money being distributed in Japan. Just because robberies are fewer than other countries does not mean Japan is crime-free. I really get sick of hearing this blatant lie.

15 ( +18 / -3 )

@Peeping_Tom

The UK is a mostly cash society. That is true. However, look at these numbers. It is assumed that in the UK 26 million people go cashless. 26 million out of 66 million people. In Japan, it is assumed that between 22 million to 30 million people go cashless. That is out of 126 million. That is a stark contrast. Also, while the UK is mostly cash, it still provides options for cashless. During my numerous travels to the UK, I never had an issue using card. But in Japan, majority of places I go to don't accept card. Even taxis. The cash acceptance rate is abysmal in places outside of Tokyo. It took me having to go through about 20 taxis to find a taxi that accepted card in Kobe the other day.

Personally, I don't use cash because cash is more expensive. With my cashback and rewards, at worst, I save 3%. If they don't accept card, it gives me an opportunity not to spend.

6 ( +8 / -2 )

You need to broaden the definition of ‘cashless’.

You missed the point. He is in effect using cash to make his payment. He is just adding another step to the payment process by first, handing over cash to charge the card, and then secondly, actually making the payment for the goods he purchased.

If his Edy card was "charged" through his bank account, like a debit card, then fine it's "cashless", yet the process he goes through actually defeats the intent of going cashless, and in fact wastes time in the process!

I have a number of debit cards I use here in Japan, and when travelling, they are connected to my bank account and when they fall below a certain balance they are "charged" automatically.

It's a painless process, and one that can be applied for online. Very convenient. But I will say for our family, we probably use cash 60% to 70% of the time every month.

5 ( +5 / -0 )

@Laguna

The reason the stores like debit over credit is because the fees they pay are less. When you run a card as debit, it gives them the money right away and they only have to pay the processing fee to the company that issued their card reader. When you run it as credit, they have to wait 3 business days to receive the money and they have to pay the processing fee to the card reader company and an additional fee to the credit card company that ranges from 2% to 3.50% depending on the card issuer. American Express charges companies the highest fees.

8 ( +8 / -0 )

I think most Japanese people feel very good about keeping proper amount of cash in wallet and seeing touching cash every time. They can't overbuy anything unnecessary emotionally as long as wallet keeps some cash. If power failure happens by earthquake, e-money can't be used. You are going to be broke even if you have millions of money in your bank. Better keep some cash in wallet in case.

0 ( +4 / -4 )

Cash usage is declining;

It definitely is in London. Hi to a bar these days in London and the barman will reach for the card reader without asking. Contactless payment has absolutely changed things. I rarely see people in London paying with cards.

The volume of cash removed from cash machines (ATMs) is falling fast, while other data shows customers are eschewing cash for cards – even for small purchases such as a coffee or a beer.

In 2006, 62% of all payments in the UK were made using cash; in 2016 the proportion had fallen to 40%. By 2026, it is predicted cash will be used for just 21%, according to figures from UK Finance.

https://www.google.co.uk/amp/s/amp.theguardian.com/money/2018/feb/19/peak-cash-over-uk-rise-of-debit-cards-unbanked-contactless-payments

The UK is not the most cashless, but compared to Japan it is completely different. While I always carry a bit of cash I know people who carry none at all.

2 ( +2 / -0 )

Hardly. It’s essentially proving that you need that person to comply to the word “cashless” verbatim or else he’s fake.

And just whatever other meaning to the word cashless is there? You missed it the first time, and now you continue to attempt to play games with semantics to cover it going over your head.

Point is far too many people here in Japan do not understand what cashless means, hence this guy, paying with cash, and assuming it was "cashless".

1 ( +1 / -0 )

Hardly. It’s essentially proving that you need that person to comply to the word “cashless” verbatim or else he’s fake.

I will save you the time; THIS is the definition of cashless. Please attempt to understand the difference between someone who uses cash to charge a card AT the register, and then use the charged card to pay for the items.

You have to be Japanese, because just about everyone else in the world, who has access to "cashless" payments, understands the nuances and difference between using cash to pay for something or not.

Definition of cashless

not having or involving cash

specifically relying largely or entirely on monetary transactions that use electronic means rather than cash

I hope you learn something here!

7 ( +7 / -0 )

Point is far too many people here in Japan do not understand what cashless means, hence this guy, paying with cash, and assuming it was "cashless".

Of course they do. When they use their card for a certain transaction, he conducted a cashless transaction.

When he took out cash to charge his card, he fully understands that he conducted a cash transaction. But in your mind, you cannot have it both ways and that person has violated the sacred rule of cashless.

-4 ( +2 / -6 )

JJJetplane, “Even taxis. The cash acceptance rate is abysmal in places outside of Tokyo. It took me having to go through about 20 taxis to find a taxi that accepted card in Kobe the other day.”

I think you meant “card acceptance rate”? Anyway it all depends where you are. In my smallish Tohoku city, nearly all taxis have taken credit cards for years and now some are also taking electronic money like Nanaco. Also the Japan Taxi or similar app, which can be linked to a credit card can be used to fetch some taxis which means you don’t even need to get out your card when you ride. I think the main problem is that without a bit of prior research which might not be so easy for some to do, one might not know until you get to a particular town what the situation is.

From what I’ve observed around me, it seems the most common cashless payments are being done in the supermarkets. For instance at our Itoyokado, there are scars of old folk, including myself, using Nanaco. Some have them linked to a credit card so they don’t need cash to charge them. I think now that it’s been in use for a few years now and people have learned how, most are using the blue machines or the 7 Bank ATMs (also at 7-11s) to charge their Nanaco cards. Even if they give cash to the clerk to charge the Nanaco, it’s still eliminating the step of giving change so it’s faster than a regular cash payment.

3 ( +3 / -0 )

Scars. — scads

1 ( +1 / -0 )

As long as there are choices of cash, credit card, e-card and smartphone pay, most elderly people would use cash first at store whatever and they would use credit cards or e-card when they don't have enough cash in wallet there. Credit card has been used for decades. Elderly people don't trust smartphone-pay system at all because they worry a lot about leaks of personal data.

1 ( +1 / -0 )

@Educator60

Thank you for the correction. Yes. I meant card acceptance. Also, what you say is true. If I take the JR train to a small area in Hyogo like Tsuchiyama, all of the taxis accept credit card and some accept payments like ID. Then I get off at Sannomiya or Kobe station which are major the 2 major stations for one of the biggest cities in Japan and its a struggle to find a taxi that accepts card.

I have not tried the JapanTaxi. Thank you for the recommendation. I will look into it.

Lastly, what you said about supermarkets is true. They seem to be leading the way in cashless payments.

3 ( +3 / -0 )

Well. As a first step they could start to accept Google Pay/Apple Pay. Not the super-secret-japanese-working-with-domestic-creditcards-only Google Pay/Apple Pay but the one that works in the rest of the world, too. That way, at least tourists could pay without cash. Also you could force taxi drivers by law to accept another form of payment besides cash. Sony could also drop licensing costs for Felica, so that every smartphone in the world could just it.

Oh and btw: Make Suica/Pasmo postpaid. Thats whats keeping me from using it for other means than transportation because I do not want to keep track of how much is left on the card and recharging and stuff... Also you could just use the Shinkansen with it, because you would not have to worry about limits...

3 ( +4 / -1 )

So damn tired of those 1 yen coins. Hopefully from October there'll be less use for them.

2 ( +3 / -1 )

where most small shops will only take cash to avoid high transaction costs.

This is an important point. Cashless transactions raise the cost of goods and services. I am glad Japanese retailers have the strength to avoid getting fleeced by financial institutions like they are elsewhere with respect to credit and debit card transactions. We would all be paying higher prices otherwise.

3 ( +3 / -0 )

Again, all anyone needs to know about "oh so backwards anti-modern Japan" and why they are using cashless payments as much as other countries is right there at the beginning of the article:

With PayPay, you don't keep track of your money.

"Unregluated spending" is the key word, and in Japan this is the opposite of what they're accustomed to.

commanteerToday  07:40 am JST

Japanese still have concerns about privacy protection and the trustworthiness of banks and payment providers. How backwards! All the progressive people are busy jumping off the cliff.

Precisely. Apparently it's not stupid if everyone appears to be doing it.

-1 ( +1 / -2 )

JJJetplane,

You're welcome.

Although I haven’t linked it to a credit card, I’ve had good experiences using the Japan Taxi app to summon taxis that accept Nanaco payments either to wherever I happen to be or to my home or another place I frequent (I’ve registered the locations in theapp). It’s linked to taxi companies nationwide so if you’re traveling you can easily check what’s available. Lately I’ve been seeing TV ads for what appears to be a similar taxi app but I can’t recall the name of it.

I think a big reason the old folks like me are using Nanaco is that a Senior Nanaco is available for those age 60 and up, it offers all the regular Nanaco perks plus some. Also in addition to 7-11 convenience stores, several of the other non-Itoyokado supermarkets, drugstores, and even the local department store now accept Nanaco.

Lots of the old folk I see shopping are also now using the Itoyokado app on their smart phones. It doesn’t have a payment option but gives other perks like accruing points, coupons, being able to view the store flyers etc.

0 ( +0 / -0 )

And Rakuten boss Hiroshi Mikitani is convinced that the future is cashless, even in Japan.

It already is in many parts of West China, Japan is behind in allot of ways. Not really that high tech either, when you travel abroad you see how over rated that term is when it comes to Japan

4 ( +6 / -2 )

TheLongTermerToday  11:02 am JST

It already is in many parts of West China, Japan is behind in allot of ways. Not really that high tech either, when you travel abroad you see how over rated that term is when it comes to Japan

I'd argue that 'high tech' in the traditional sense is overused to describe places other than Japan. Not just overused, but thrown around to the point it has lost all meaning.

Take singapore for example, yes they accept cashless payments almost everywhere, but that doesn't mean its high tech, either. It's just an example of quicker uptake of a particular payment solution. Those solutions were already in place in Japan.

So aside from the rental electric scooters and... umm... that's all actually. Rental electric scooters were around the place in Singapore. That's it. So much more high tech than Japan....

0 ( +2 / -2 )

I have no problem with people not wanting to be tracked. We're already very far into Big Brother territory without all our payments being recorded and the information inevitably being sold to the highest bidder. Give a tenner to Extinction Rebellion and it's "no sir, you can't come in our country".

I use cashless payments a lot, but only because I am addicted to buying second hand stuff on Yahoo Auctions. In shops, I use a card because my wife wants points.

Japanese people struggle enough with bike parking for electric scooters to be brought in and use public pavements as free premises. I don't think this is a sign of being backward.

6 ( +7 / -1 )

Japanese people can use as much cash as they would like. It doesn’t bother me. But when you are doing more and more to attract tourists but offer limited payment styles, that annoys me. Stores and restaurants need to give more options than cash. I’ve gone to many third world countries on vacation in the Caribbean and South East Asia. During my travels I used only credit card in those countries except for small boutiques owned by a local in a way off village.

8 ( +8 / -0 )

Japan relies too much on credit cards. Japan does not have a direct debit system. The prepaid cards like Suica are much more convenient. Most Japanese people two, three or more credit cards. However, it is very difficult for a foreigner to get a Japanese credit card. An international credit card can be advantageous, but the fees for international transactions can be very high depending on your type of card. Instead of relying on fantastic plastic, a direct debit system is much more convenient and without excessive transaction fees.

1 ( +2 / -1 )

Japan does not have a direct debit system. 

Huh? I wonder what "Japan" you are referring to here? Read page 12 of the attached pdf. It's been around for nearly 2 decades, and there are well over 300,000 outlets in Japan where debit cards can be used.

Even my tiny regional banks offer them.

I also have Japan Net Bank debit as well, and they directly withdraw from my card/bank account when necessary!

https://www.zenginkyo.or.jp/fileadmin/res/en/banks/payment-systems/paymentsystems.pdf

However, it is very difficult for a foreigner to get a Japanese credit card.

Not really, if you have a stable income, are a permanent resident, it's very easy.

3 ( +3 / -0 )

I think the confusion here is in the term ‘debit card’. In recent years these can be used as credit cards overseas, directly debuting from your account. It’s not a common option in japan though.

-1 ( +1 / -2 )

Being self-employed,,our students pay in cash.Never want that to go away.What can beat cash in the hand anyway? Besides robbing a bank?

3 ( +3 / -0 )

Do the hustle, “Japan does not have a direct debit system.”

Not true. I’ll also vouch that Japan has the J-debit system which directly debits your bank account. I got a J-debit card a long time ago when they first became available. There was a lot of hype about how good they were, didn’t require approval like a credit card, no fees, etc. Used it a few times at the department store but smaller stores were very slow to adopt them and the promotions for them gradually faded from view. But they are still around.

https://www.debitcard.gr.jp/

1 ( +1 / -0 )

Out of nostalgia and curiosity I had a quick look at where the J-debit cards can be used in my prefecture. It seems the local department stores no longer take them nor do any supermarkets, but they’re accepted at just about all the hotels, ryokans, and other lodging places, as well as JTB offices, one of the big appliance store chains, one of the many eyeglasses chains, a few eateries and tourist attractions, and one dentist!

0 ( +0 / -0 )

 Used it a few times at the department store but smaller stores were very slow to adopt them and the promotions for them gradually faded from view. But they are still around.

I have a Japan Net Bank/Visa/Family Mart/T-Card (yeah all rolled into one!) it's a debit card, and cash card, and I use it nearly every day at the Family Mart I use.

https://login.japannetbank.co.jp/wctx/AF.do?SikibetuId=2016000045&gclid=Cj0KCQjwwIPrBRCJARIsAFlVT88b4GfdVoFRt2CHjVciNZVy1-bLsTYGdPGw08pTBeRDH5RYFAQIRloaAvd1EALw_wcB

They are still very much around, and my local banks advertise all the time about debit cards, both domestic use only and international cards. Have no idea why they kept them separate, but they are available and evidently widely used as well.

2 ( +2 / -0 )

At my local dentist, I had forgotten to bring any cash-“that’s ok, just bring it next time!”was the cheery refrain.

Thats Japan!

7 ( +7 / -0 )

Kurisupisu,

That happened to me as well,lol.

1 ( +1 / -0 )

As a shop owner, I couldn't be happier with that. Saves me giving 3,5% on every transaction to card companies !

0 ( +0 / -0 )

Recently I offered a J debit card to pay for something because I had left my cash at home. The staff were confused, the manager was called, and the card was passed around and debated. I assured them that I had used it elsewhere just recently, so they took me at my word and tried it in the machine. It went through! Miracle.

In London I often feel like a dinosaur when I use cash, and this summer I have sometimes seen bar staff looking momentarily blank, unable or struggling to calculate my change.

I Japan I feel comfortable using cash, as if I am in control of things. I do not see cashless as the 'way ahead', but a parallel road under construction that maybe needs completing.

4 ( +4 / -0 )

NB Correction, last paragraph. In Japan, not 'I Japan'.

3 ( +3 / -0 )

One reason the government is pushing for people to go cashless is also psychological. when people dont use cash they often "forget" how much money they are using, like with credit cards, they use the cards and dont really think they are using money, for the newbies at least, and people spend more.

And that is the goal, get people to spend more money!

6 ( +6 / -0 )

Japan is very "omotenashi" until its time to pay. Always have to make your way to the register and then pull out the wads of cash. It's usually a turnoff for me unless the restaurant is exceptionally good. What's mind boggling is some restaurants have the completely electronic ordering system, but to pay you still have to bring the paper receipts (and they print another one every time you add something to your order) to the register and wait in line.

0 ( +0 / -0 )

The banks are the main push behind a cashless society. They would like to be done with all the ATM machines which are expensive to maintain and service. They want smartphone banking instead which would save the banks a fortune.

3 ( +3 / -0 )

I prefer to use cash. I will withdraw cash from ATM then walk in the shop next door and pay with cash. All these card transactions are so fast and easy it fools you into spending more, sometimes buying things you would never have bought if you had paid by cash

2 ( +3 / -1 )

Mizu no oto:

Govt and business has been in that game long before cashless move. Doesn't matter what you use. Bills can be counterfeited, central banks and govt can use inflation as invisible tax, coins can have original value of metal replaced (loss of intrinsic value), full value coins can be clipped by govt or business. Hegg, even direct barter had issues - the goat would not produce milk even if that's what they bought it for. It's people that are the issue, not the method of transaction.

1 ( +1 / -0 )

On the "but in London NOBODY uses cash" rubbish:

Just spend 5 mns inside a Sainsbury or Tesco stores, chech how many people use the self service chech outs. Usually there's a massive queue waiting to pay by the cash registers, while the self pay machines gather dust.

Of course people use them; however many more than just a few DON'T. And when they are finally attended by the staff they spend their time, inconveniencing others rummaging for 1 p coins to pay for their shopping!

And NO! They're not all over the hill old fogies, just in case you're thinking of this line of defence.

Just 2 days ago my neighbours had an argument with the Pizza delivery guy, as he did not accept cards, thus was refusing to hand over the Pizzas.

Hi-tech Britain at its best, I say.

Yet, we have jokers claiming that "nobody uses cash in the UK these days"!

-2 ( +2 / -4 )

Here in Japan, we still use FAX machines. That is how it works here. We always mix the past and the present.

1 ( +2 / -1 )

Having a cashless society sounds great in theory and it would be great if administered by sincere people who care about us, BUT they don't care about us in the least, they will only use such a system for profit and control.

Unfortunately, the day will come when dissenters or whoever else dares to not fall into line with the elites will find thier plastic money cards blocked and useless. God help us all.

3 ( +3 / -0 )

To replace the paper money and coins that are lost or broken in circulation, it costs the Mint more than the money's worth

0 ( +0 / -0 )

"Four out of five purchases are still made with cash in Japan, despite its reputation as a futuristic and innovative nation."

This is the problem here. Who made the assumption that Japan was this futuristic, innovative nation. Japan has some technological advances in certain areas, but overall Japan is not all that different from the rest of the world.

Yes, countries like Canada and the U.S. are becoming more cashless societies, but at what cost? A very large portion of the population is sinking in credit card debt. I think Japanese people are wise sticking with cash, because people are more cautious with unnecessary spending.

3 ( +4 / -1 )

I lived in Japan for 6 years and was quite the hassle to have to carry around cash and not be able to track purchases easily. Now in US I can put 5 bucks in my wallet and carry it around for months. I love cashless as I can set up auto payments, track and categorize every purchase, forecast spending, budget easier, save more, easier to pay my share of costs to friends and on and on. It is quite wrong to say you save more by using cash, if you are a uncontrolled spender you will do it no matter what. Come on Japan to 21st century!

-4 ( +1 / -5 )

In London I often feel like a dinosaur when I use cash, and this summer I have sometimes seen bar staff looking momentarily blank, unable or struggling to calculate my change.

Tells you all you need to know about education in the UK. Governments around the world are figuring out that it's easier to fleece uneducated sheep than educated sheep.

5 ( +5 / -0 )

Paypay LOL

sounds like a Panda bear name.

1 ( +3 / -2 )

@LandOfTheLost

Japan’s government reveals a very different pattern. Here, public debt continues to grow, already hitting ¥1.3 quadrillion or 245 percent of GDP — one of the highest public debt levels globally

What were you saying about Japanese not having debt? The debt levels are increasing all over the world. Not just the US and Europe. As the top 1% gets richer, the poor become poorer which results in increased debt to live and maintain a certain lifestyle.

3 ( +3 / -0 )

Mizu no Oto, No, you’re not a nut. I’m really glad that you actually sent all that, because I feel the same way about all this. I mean I’m concerned enough with all this talk about a cashless society in general, and the last thing that I want to have happen, it is for that kind of stuff to happen in Japan. Especially since I’m looking to move over there in a year and a half’s time, I don’t want all the things that I like about Japan to go away, simply because they’re trying to keep up with global trends. If I want to live in a place that simply cared about keeping up with global trends, I would move to some other country. But since I don’t, I’m choosing Japan. (also for many other reasons, don’t get me wrong)

I mean I’m not totally against global trends and stuff, I just don’t want them to come at the cost I things I like about Japan. Also other countries yes, but especially not Japan!

3 ( +3 / -0 )

Yubaru - Japan does not have a direct debit system. Huh? I wonder what "Japan" you are referring to here? Read page 12 of the attached pdf. It's been around for nearly 2 decades, and there are well over 300,000 outlets in Japan where debit cards can be used.

Sorry, Japan does not have a direct debit system. This is a system whereby you just swipe your card, put in your PIN and the money is directly taken out of your account. Nearly every shop in Australia has this system. Even taxis have the system. In fact most Sydney taxis are cash free, especially on weekends. It is completely different to a debit card. It is just your normal bank account card.

-2 ( +1 / -3 )

Direct debit differs by country so its useless to compare. Japan's version is widely used for recurring payments and it usually requires filling out a form and stamping it with your hanko. But if your lucky you can do it online by just logging into your bank and clicking some buttons.

0 ( +0 / -0 )

"Sorry, Japan does not have a direct debit system. This is a system whereby you just swipe your card, put in your PIN and the money is directly taken out of your account."

And the difference with the UK DD is exactly what/where?

"What is a Direct Debit?"

"According to the Financial Conduct Authority, you’re 24% less likely to incur unarranged overdraft charges if you use a mobile banking app and text alert service.

When you set up a Direct Debit you tell your bank or building society to let an organisation take money from your account.

The organisation can collect however much you owe them, but they have to tell you in advance (normally ten working days) how much they’ll take, when, and how often.

Direct Debits are handy for paying regular bills, such as gas or electricity, especially if the amount regularly changes."

https://www.moneyadviceservice.org.uk/en/articles/direct-debits-and-standing-orders

1 ( +2 / -1 )

Maybe if they change the stupid name from Paypay, I would start using it

1 ( +2 / -1 )

Debit cards in Japan and overseas do the same thing at their core. The difference is that many overseas banks have tied up with visa or mastercard so that when the option exists to pay by credit card, these credit card companies will facilitate the payment by debiting the person's account.

1 ( +1 / -0 )

Also you could force taxi drivers by law to accept another form of payment besides cash.

In Tokyo it would be difficult to find a taxi that does not accept credit cards or other forms of non-cash payment.

However, it is very difficult for a foreigner to get a Japanese credit card.

Not my experience. If I had taken and used every credit card that was offered to me before I had Japanese nationality, I’d be up to my eyebrows in debt. @Yubaru is spot on with his comments.

One reason the government is pushing for people to go cashless is also psychological. when people dont use cash they often "forget" how much money they are using, like with credit cards, they use the cards and dont really think they are using money, for the newbies at least, and people spend more.

Yet again @Yubaru is spot on with this comment.

Just spend 5 mns inside a Sainsbury or Tesco stores, chech how many people use the self service chech outs. Usually there's a massive queue waiting to pay by the cash registers, while the self pay machines gather dust

That’s been my experience as well. Very often the self-pay machines are not working.

Here in Japan, we still use FAX machines.

FAX is still widely used in the US/UK. In some business sectors FAX is the one legally accepted alternative to paper mail.

I have been doing research for an article about the advocacy of a “cashless” society in Japan. Some points from my research and UK experience.

Germany is also a major cash economy but gets little of the attention Japan does.

https://www.npr.org/2019/06/09/728323278/for-many-germans-cash-is-still-king

Small business in the UK is more than happy to take cash and will often given you a discount if you pay in cash. (5% in the case of my favorite Oxford B&B.)

Paying with plastic in the UK is usually slower than paying with cash, especially at supermarkets.

In a “cashless” society, you are in really deep trouble at least for some days, if you wallet or phone goes missing.

If the power/communications infrastructure goes down, cashless payments are impossible.

Paying with credit/debit cards (or phone equivalents) means that there is a record of everything you bought, when, and where. That record can be misused; that record will be misused. Electronic payment systems allow not only tracking but the possibility that your ability to spend can be revoked the way digital rights to books/music can be revoked by remote control.
0 ( +1 / -1 )

Sorry, Japan does not have a direct debit system. This is a system whereby you just swipe your card, put in your PIN and the money is directly taken out of your account.

Again I wonder what Japan you are talking about. I explained in an earlier post, that I do EXACTLY what you are referring to here and on close to a daily basis as well.

My money comes out from my bank account directly. So I am sorry but you are wrong, Japan most definitely has a direct debit system and I know plenty of people who use it as well!

My son in Tokyo does as well! We ensure money is in his account, and he budgets from that. Very convenient!

What you may be mistaking for credit card purchases, many times are debit card as well! The process in many cases is exactly the same!

https://gaiyaba.wordpress.com/2017/10/25/getting-a-debit-card-in-japan-japan-net-bank-visa-debit/

https://www.sevenbank.co.jp/english/personal/account/jcb_debit/

https://www.visa.co.jp/pay-with-visa/find-a-card/debit-cards.html

https://www.tokyofamilies.net/2017/08/what-is-the-best-debit-card-in-japan-for-foreigners/

0 ( +0 / -0 )

Debit cards are becoming INCREASINGLY more popular in Japan, due to the fact that even underage people can use them, unlike credit cards.

Debit card use is going UP, and anyone who is trying to say that a debit card system does not exist in Japan is 100% wrong!

0 ( +0 / -0 )

Sorry, Japan does not have a direct debit system. This is a system whereby you just swipe your card, put in your PIN and the money is directly taken out of your account. Nearly every shop in Australia has this system. Even taxis have the system. In fact most Sydney taxis are cash free, especially on weekends. It is completely different to a debit card. It is just your normal bank account card.

Taxis here take BOTH debit and credit! The card reader is the same for both, as debit cards here are connected through VISA and other major credit cards, but they are NOT credit cards but debit cards.

Mine swipes from BOTH sides, one side is the "credit/debit" and the other is for "cashing" at an ATM.

But since my card is NOT a credit card and only debit, the money is directly taken from my account and I get a statement within minutes, on my phone, through Japan Net Bank, confirming the transaction.

I do not understand why you continue to refuse understand all this.

0 ( +0 / -0 )

Direct Debits are handy for paying regular bills, such as gas or electricity, especially if the amount regularly changes."

Typically though here in Japan, people set up direct payment from their bank accounts with their utility companies, and cell phone providers, for these services, hence there being no needed paperwork.

However, payment can be made with credit or debit, with the bill at just about any local convenience store here.

0 ( +0 / -0 )

Taxis here take BOTH debit and credit! The card reader is the same for both, as debit cards here are connected through VISA and other major credit cards, but they are NOT credit cards but debit cards.

Mine swipes from BOTH sides, one side is the "credit/debit" and the other is for "cashing" at an ATM.

This is where the confusion is coming from. Overseas, the debit card is one and the same as a credit card. Not a separate system, and does not require a special reader. As far as the system taking the card is concerned, it's a credit card - the number is even the same pattern as the visa/mastercard that it is backed by, it's a credit card number not your account number.

I've never seen that system in Japan. If it exists, I'd like to know, I want one of those cards as I prefer not to buy anything on credit.

0 ( +0 / -0 )

Japan does have a direct debit system. Direct debit is where someone withdraws the money directly from your bank account. My credit card takes the money directly out. Personally I don’t like direct debit systems. It gives the person that is taking the money too much control. That’s how people got in trouble with payday loans back in the US. When you give out your banking information, you can only truly stop them by closing your account and creating a new one.

1 ( +1 / -0 )

This is where the confusion is coming from. Overseas, the debit card is one and the same as a credit card. Not a separate system, and does not require a special reader. As far as the system taking the card is concerned, it's a credit card - the number is even the same pattern as the visa/mastercard that it is backed by, it's a credit card number not your account number.

I've never seen that system in Japan. If it exists, I'd like to know, I want one of those cards as I prefer not to buy anything on credit.

Reread what I wrote please! The card reader is one and the same! And no it's not a "credit card" it's a debit card, just issued by VISA through Japan Net Bank!

I am NOT buying on credit, I am making purchases and the funds get taken out of the balance on the card!

I've never seen that system in Japan. If it exists, I'd like to know, I want one of those cards as I prefer not to buy anything on credit.

Just because visa issues the card does not make it a credit card. It's a visa debit card! I COULD set it up to have funds put into the card on credit, if the balance in my bank account is too low, but mine is NOT set up that way, it's 100% debit only!

Just because you havent seen it, does not mean it does not exist! It goes through their "accounts" by their numbering system, but it comes out of MY bank account or balance!

I have TWO cards with Japan Net Bank, one connected to my bank account, and another that I charge like a prepaid card, and use as necessary or let someone in my family use!

Once again, basically the THIRD time here!

https://www.japannetbank.co.jp/

https://gaiyaba.wordpress.com/2017/10/25/getting-a-debit-card-in-japan-japan-net-bank-visa-debit/

0 ( +0 / -0 )

Direct debit is where someone withdraws the money directly from your bank account. My credit card takes the money directly out.

That's not direct debit. Direct debit comes out of your account when you pay. What you are describing is a two-step process - you pay with credit, on your credit card, then your credit card settles that bill by withdrawing your monthly payment from your account. The two-step process means it is not direct.

-1 ( +1 / -2 )

Japan does have a direct debit system. Direct debit is where someone withdraws the money directly from your bank account. My credit card takes the money directly out. Personally I don’t like direct debit systems. It gives the person that is taking the money too much control. That’s how people got in trouble with payday loans back in the US. When you give out your banking information, you can only truly stop them by closing your account and creating a new one.

EXACTLY! I am getting the feeling that some people dont understand the difference between debit cards and credit cards!

When I got my first credit card here, a very, very, very, long time ago, I made a HUGE mistake, thinking the system here was the same as in the US. I made a very large purchase for our house, TV, VHS, Stereo, cost around 800,000 yen.

This is damn near 40 years ago, but I will never forget the lesson!

I got a bill the next month for the entire amount, expecting to be able to make a "minimum" payment, and keep my credit good, I woke up fast about the system here, as I HAD to pay the ENTIRE amount. Needless to say, I ended up losing the card, got temporarily "black listed" (5 years) as I was unable to pay the full amount in one payment. I ended up making something like 4 or 5 installments, but it shot my credit record here for 5 years.

I learned my lesson, and while I do have a credit card, it is used ONLY for emergency purchases, otherwise everything else is either cash or debit!

2 ( +2 / -0 )

All this talk reminded me of years ago when here in Japan all our rent, utilities, credit card, and any other regular bills, even those that occurred only once a year like NHK, were being automatically withdrawn from our bank accounts. It was a shock to visit the US and see everyone I knew still sitting down to write checks which they then snail mailed to pay all those things. If I recall correctly, for credit cards they had to decide how much to pay each month, whereas I selected the number of payments at time of purchase, or arranged for a fixed amount to be paid each month. Having never had a credit card in the US, the Japanese system was my only experience and the US system looked very primitive to me.

1 ( +1 / -0 )

Reread what I wrote please! The card reader is one and the same!

You wrote:

Mine swipes from BOTH sides, one side is the "credit/debit" and the other is for "cashing" at an ATM.

Ok so the card has two different reading strips/chips. So it's not exactly the same.

That said, it sounds like what you have is what I want - where can we get this card? What bank?

0 ( +0 / -0 )

That said, it sounds like what you have is what I want - where can we get this card? What bank?

I probably should have read the rest of your post:

https://www.japannetbank.co.jp/

2 ( +2 / -0 )

So, that does look helpful. I'll likely open an account with that bank, as I prefer to use debit over credit.

That said, I think part of the issue is that while it looks to be possible in Japan, it's the standard in some (most?) other countries. Your debit card is already linked up with Visa etc, it's not a special effort that has to be made. At least, this is the case in the last two countries in which I needed to open accounts. I didn't even ask for a visa-linked debit card, my cards just came to be already being like that.

Japan still has a ways to move in this regards.

0 ( +0 / -0 )

I'm mostly cashless these days, but I refuse to use PayPay because of the stupid name.

-1 ( +0 / -1 )

Personally, if a venue refuses legal cash payments, I refuse to patronize them and tell them so.

Generally dumbass hipster "early adopters" who think they are being cool while in fact they are being used to normalize a total surveillance society of the type someone else warn dependent on very fragile technology, and more bank charges.

I'll claim the Charlton Heston Amendment on this one; "I'll give up my cash when you pry it from my cold, dead hands!" 

@Strangerland

I think there are crossed wires here.

Isn't there a confusion between one Debit Card payments and regular Direct Debit payments?

"a Direct Debit is an instruction from you to your bank. It authorises the organisation you want to pay to collect varying amounts from your account "

0 ( +1 / -1 )

Well, the confusion is that contrary to claims that debit cards that can be used in lieu of credit cards don't exist in Japan, they do, but that they aren't nearly as prevalent (or even known) as they are in other countries. Creating some confusion in the conversation.

3 ( +3 / -0 )

Japan does not have a direct debit system.

Many years ago my bank issued me with a card that works as a cash card, a debit card and a credit card.

I occasionally use it as a cash card to withdraw funds (not so much these days when most of my shopping is cashless), I use it as a credit card to pay a utility bill because that's a condition for having no service fees and no ATM charges, and I've never used it as a debit card because I can't be bothered to be always up to date as to how much money there is in the account it's linked to.

Wherever possible I pay by prepaid card in shops, while regular payments and larger items go through my husband's credit card. It makes calculations a lot easy (just check one day a month that there's enough money in the account, transfer some over if necessary) and brings an added bonus in the shape of points that turn into cash.

I don't understand why people insist on paying cash only.

2 ( +2 / -0 )

Most of the stores have their own debit cards and my wife uses them all of the time. She puts the change on them or charges them up. Come next month or so, she will charge them up but keep the balance for end of year shopping.

We use family credit cards but mostly for online shopping.

0 ( +1 / -1 )

@Strangerland

As a former personal banker, operations manager, branch manager, and more with JPMorgan, I am pretty sure I know what a direct debit is. A direct debit is where payments are communicated directly with your bank and doesn't have to go through you. That is why its direct. It comes directly from your bank as opposed to them sending you the bill and you paying them. My union dues are direct debit, my credit card is direct debit, my child's school bill is direct debit. Using a debit card is not a direct debit because the store never receives your actual bank information. It is simply a process that is similar to cash and is not held against something else. Credit is held against a proposed credit given to you by a crediting organization. A debit card is something ensured directly by your funds available. A direct debit is where you allow access to your bank account to the payee.

5 ( +5 / -0 )

JJ Jetplane

You're absolutely correct in everything you said,

Even I , a non banker have operations that fit your descriptions, with exceptions to Union & child dues, as I've got none of those.

The c"confusion" stems from 2 factors:

1-Many don;t know what Japan has to offer, even though they live (or claim to) there

2- Some spend far too much time indulging in fantasies, such as my country has got it all, while Japan still uses FAX.

Simples.

1 ( +1 / -0 )

Ok so the card has two different reading strips/chips. So it's not exactly the same.

You still miss something here, the "READER" is the same, just because the card has two different strips does not change the reader!

1 ( +1 / -0 )

Card - Money runs out quickly every time i buy, Kching! Kching! Kching!

Cash - i search my cash in my bum bag, if it's not enough, then no problem, i walk out for fresh air!

0 ( +0 / -0 )

When there's multiple registers and there's a card-only line, the line there moves faster

0 ( +0 / -0 )

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