Over 50 banks in Japan are joining forces to launch a new cashless payment system developed by Mizuho Financial Group, which is due to start late in March.

According to sources close to the matter, the new J-Coin service will be initially set out to existing account holders at regional banks, such as Chiba Bank and Nishi-Nippon City Bank.

Mizuho Bank will initiate the service on March 1, with other regional banks following in the three weeks after, from March 25. 

The initiative taken by the Tokyo-based mega-bank J-Coin arrives at a time when the Japanese government is endorsing the use of cashless transactions, prior to the 2020 Tokyo Olympics and Paralympics. Japan’s goal is to double digital payments so that they comprise 40% of all financial transactions by 2025.  

Payments conducted through J-Coin will be processed through a mobile application using a QR barcode, a phone number or a Line messenger personal identification number. 

Unlike prepaid smartcards, which are widely used in Japan, J-Coin enables individuals to process transactions without requiring the instalment of dedicated scanning devices at points of sale. 

A few key retailers in Japan have already expressed interest in implementing the system, including East Japan Railway Co and FamilyMart. 

As the Japanese government looks towards accelerating the use of cashless transactions and promoting digital payments, it will offer a 2% rebate on any cashless purchase made from a convenience store, and rebates of 5% for digital buys from other small or medium-sized shops, for nine months after the consumption tax is hiked from 8% to 10% in October 2019.