Cashless in Japan
In October 2019, Japanese VAT went up from 8% to 10%. In order to encourage people to spend money after the increase, Japanese Ministry of Economy, Trade and Industry started a new limited campaign promoting cashless system with points system.
Japanese cashless-point system explained
Basically, when consumers pay cashless(ly) using cards or electric devises at businesses which are registered with this cashless-point system promotion, they would get certain points, those points would have cash value.
Currently, about 940,000 business are signed up to be in this campaign.
Until June 2020, consumers are entitled to get 5% of their spending as points at majority of registered small businesses, 2% at the francize businesses and internet shopping. People are able to look up which shops are registered for this system by using an app and website. Shops are also identified by special marks on their front entrance.
The Ministry of Economy, Trade and Industry is providing detailed information sessions at events, pop up boots and seminars all over Japan.
Variety of Cashless payment
In Japan, there are different cashless payment options.
The most common one is Japanese original prepaid card, called IC Card which is developed by Sony. There are currently 10 of them in Japan and they are based on a location. This is because IC cards have travel pass facility. The famous ones are Suica and PASMO. They are widely used in Tokyo as well as Eastern Japan.
Debit cards are starting to get known in Japan because Major Japanese banks started to offer the service. The amount of money people spend is deducted straight away from the bank accounts.
The usual practice, credit cards are also one of the options for cashless payment.
Lastly, smartphone payment is widely accepted in Japan. The latest technology allow a checkout machine to detect a consumer’s smartphone without it’s been presented. This means that people just have to acknowledge the amount at the casher.
How those points would be awarded
Award points are credited to consumers differently. IC card points are awarded monthly at the end of the month. Debit card points would be awarded to bank account. Credit card points would be deducted from monthly bills. Some convenience stores may instantly give discounts.
The reason behind the campaign
Cashless payment is a global movement, so governments can track and monitor their money. China recently adapted a radical way, it is impossible to live in China without electric money, even beggars have mobile phones to beg for eclectic money. Japan would not copy the same tactic but cashless society is hugely promoted by the government.
This limited campaign is already out of budget due to its popularity. This would boost Japanese economy temporary but after the 2020 Olympic, Japanese economy might face a new problem.
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