Cashless payments in Japan are on the rise following the implementation of government subsidy schemes being taken up quicker than expected.
The subsidy schemes were designed in order to promote and encourage the public to make more cashless payments when shopping.
Shoppers receive points amounting up to 5% for transactions paid for in a cashless method. Such points are only earned if the purchases are being made from small and medium-sized businesses.
In addition, the government is also supporting such businesses by offering subsidies to help them install cashless payment equipment.
Japan’s authorities were recently asked to see the scheme extended by the International Monetary Fund (IMF). The IMF had recommended other Asian countries to keep cash payments going.
Japan’s scheme was set to be active for 9 months, finishing at the end of June 2020.
Extending the scheme would “cushion the impact” of October’s increased retail levy rate, which resulted in a 2%-point sales tax rise.
Japan’s Ministry of Economy reported that during October 1st and November 4th, daily rebates from the cashless payment scheme to consumers averaged ¥1.2bn (US$11m).
It is expected that ¥280bn (US$2.6bn) have been budgeted until the end of March, that will be used for both rebates and to help business offer cashless-payment methods.
The Japanese government is aiming to see the amount of digital payments be twice as much as they are now – equalling 40% of consumption by 2025.
Moreover, there was also an increase in digital payments for East Japan Railway Company. The firm’s deputy general manager, Tomoyuki Soyama said, “Customers benefit from the convenience of electronic payment, while we receive fees and reduce costs by going ticketless.”