The Japanese transportation industry is leading the nation’s long-standing attempts to proceed cashless. Earlier this month, two big players from the archipelago’s e-commerce and transportation industries booted up to simplify and encourage obligations which don’t need hard money.
Homegrown e-commerce giant Rakuten plans to integrate its own services into Japan’s premier railroad business, the East Japan Railway Company or JR East to provide electronic support for the”Suica” cards.The cards are utilized to get trains as well as to pay for goods and services in particular kiosks in train stations and select stores across the country. If all goes as planned, users will have the ability to charge their transit cards using the Rakuten Pay cellular program by 2020.There are several 5,000 train stations and about 50,000 buses in Japan, according to the government information.
Currently, Rakuten Pay is used in over 600,000 shops in Japan.In a country with strong cultural predisposition toward bills and coins, the latest move could result in a massive change to the daily routine of Japanese commuters and possibly contribute to the nation’s push to the use of cashless payment systems.Cash is kingThe most recent data in Japan’s Ministry of Economy, Trade and Industry (METI) reveals just 20% of the country’s population make a payment through cashless approaches — a behaviour Tokyo has been trying to alter.
Two years after that, the Japanese authorities published an updated replica of its Abenomicspolicy, named after Prime Minister Shinzo Abe, that reiterates the nation’s goal of achieving a cashless payment rate of 40 percent by 2027. Prime Minister Shinzo AbeThe most important reason for this effort comes to the hesitation of the Japanese people to move away from using money in their daily transactions. Takeshi Tashiro, a visiting fellow at the Peterson Institute for International Economics, told Cointelegraph a range of socioeconomic variables have perpetuated the Japanese affinity of utilizing money.”Japan’s cashless payment ratio is roughly 20%. Some of the reasons are high reliability of money, low theft and high safety; as well as easy access to cash. Deflation may contribute to the trend as that increases the worth of cash.”Another contributing factor is Japan’s aging population.
Within the last 40 decades, the number of Japanese individuals over age 65 has almost quadrupled.”For more than two decades, Japan has experienced a’graying population’ because of both long-life lengths and low birth-rates,” a former United Nations official in Japan who asked to remain anonymous remarked in an interview with Cointelegraph. “Hence, the older people tends to stick to the old custom of using money; a habit learned from a time before money cards, ATMs and charge credits were issued from the late 1980s.
“The convergence of the factors, namely non crime, deflation, along with an older people that are content to keep on using money have abandoned the country lagging behind others which are quickly embracing many different digital payment options.
The partnership between Rakuten and JR East could be an important catalyst in the adoption of an abstract payment method and also break down the ethnic apathy toward it.In March, numerous publications theorized Rakuten Pay would consider integrating cryptocurrency support on its cellular app.Rakuten Payment CEO Koichi Nakamura advised Cointelegraph Japan last week that it could not elaborate on the incorporation of cryptocurrencies as a payment option but declared the company had reached a stage where a last decision needed to be produced.
“At this moment, there’s nothing we could share with you as to crypto payments,” Nakamura responded to an inquiry from Cointelegraph Japan, shortly after the media conference where its collaboration with JR East was declared .”But now we are in a stage where we consider whether we can utilize cryptocurrency for a source of obligations,” he continued.The CEO emphasized two important considerations that would finally determine if the organization would include cryptocurrency support for the Rakuten Pay app:
“First and above all, the crypto related service has to be secure. It must comply with appropriate regulatory frameworks. Secondly, it shouldn’t be difficult for users to utilize. We aim for familiarity, convenience and comfort. I don’t need that to be too tough to take care of from the start. You understand there are still a few individuals who believe that smartphone payments are too hard to use.”Rakuten is widely considered as the Japanese equivalent of Amazon, and its partnership with JR East would probably affect almost all Japanese commuters and online shoppers. Based on data from Statista, Japan’s railways serviced over 70% of the country’s total passenger transport volume in 2016.The e-commerce giant’s standing as a pioneer in its field gives it hefty clout in boosting using cryptocurrency as well.
It’s among the latest firms to be given a license to run a cryptocurrency exchange by Japan’s Financial Services Authority.Late March, the business declared it would launch its own exchange, dubbed Rakuten Wallet, this month using accounts software having opened in April. Rakuten had acquired the service formerly called Everybody’s Bitcoin in August last year for just more than $2 million.The strong money dependency in Japan is in stark contrast to other nations in the area, especially its nearest neighbors.In the last several decades, South Korea has become a significant hub for cryptocurrency trading, despite its authorities taking a tough position toward the industry. The nation is now famous for the”Kimchi Premium,” referring to how traders pay a higher cost for bitcoin compared to the price of this cryptocurrency on exchanges in other countries.Even in the midst of a gloomy cryptocurrency market within the past 18 months, a report suggested South Koreans were purchasing more digital currency in April 2019 than in previous years. The country’s central bank poll revealed money payments only accounted for 20 percent of payments made in the peninsula last year.In his correspondence with Cointelegraph, Tashiro contended South Korea’s benefit in this aspect is mainly down to government policies which have promoted the use of alternative payment methods, along with the widespread opinion of South Koreans’ appetite for its fast adoption of new technologies.
“Korea has among the world’s most widely used cashless payment systems, using its cashless payment ratio exceeding 90%. That is because, as a federal coverage credit card settlement was encouraged under the advice of the federal government, for example deductions of 20% of the amount of income used by credit cards and obliging stores to use charge cards”China is also on track to becoming a cashless society. This is largely because of the presence of two of the world’s most important companies, Tencent and Alibaba. The two technology giants like a near monopoly on the country’s payment and messaging software, respectively called WeChat Pay and Alipay.By 2017, there were networking reports that nearly three quarters of Chinese people were utilizing digital payment approaches over money. Merely to indicate how hot WeChat Pay had become, data from an Ipsos poll in the exact same year showed it was the leading smartphone application for Chinese consumers to make payments over 1 billion busy monthly users.China’s mobile transactions were far higher than that of the USA in 2017, thanks to its 1.4 billion citizens. Last year, the U.S. population was recorded at 327.2 million.
By virtue of their sheer number of consumers in China, WeChat Pay and Alipay have expedited the nation’s transition from money to digital payments, bypassing checks and credit cards.Private sector because the key to Japan’s move away from cashTokyo is making concerted efforts to promote the development of new cashless payment solutions and their adoption by general customers.Ahead of the new earnings tax increase this October, the Japanese government is taking measures to stimulate consumer spending. One of those steps is the provision of reward points of up to five percent on purchases made with cashless payments at little and medium-sized businesses. The incentive will be in effect for 2 weeks to encourage Japanese consumers to test out the various cashless payment options available.
The partnership between two family names in Japan will give a major boost to the government’s continued efforts to encourage its aging people to attempt new payment methods. Along with the Japanese regulatory body’s energetic involvement in cryptocurrency commerce, 2019 might be the year when old habits eventually give way to the change of times.