Efforts to do away with personalized name seals, known as hanko, have spread in a variety of industries, especially among IT companies, as a growing number of people have begun working from home amid the coronavirus outbreak.
Hanko seals, which are stamps dipped in red ink that traditionally act in lieu of a signature as a part of business transactions, are particularly used for in-house transactions or application procedures in Japan. Electronic seals or signatures, however, are expected to be used as their replacements.
Major flea market app operator Mercari Inc. in early April requested its business partners to refrain from using corporate hanko seals and to instead utilize electronic signatures for contracts, thus enabling Mercari employees to work from home as much as possible.
Although Mercari had urged its employees to work from home following the government's request to avoid nonessential outings, some were still forced to go into the office to verify documents with corporate seals so they could be submitted to business partners.
Unlike hanko seals, an electronic signature can verify contracts and other documents sent via email, allowing this practice to be carried out anywhere.
Major IT company GMO Internet Inc. plans to abolish the use of hanko seals mainly in application procedures for online and other customer services.
LINE Corp. has also, in principle, done away with written contracts -- barring those necessary for legal procedures -- earlier this month.
A survey conducted by the Japan Association for Chief Financial Officers from March to April showed that 40% of companies that had introduced a teleworking system reported some workers were still coming into the office to either verify documents with hanko seals or complete other tasks. The survey's results indicated that many companies are still bound by the inter-business hanko seal culture or the legal requirements of using the seals.
Major manufacturing business operators have also called for a review of the hanko system to cope with situations like the current one.
"Using a hanko seal makes no sense; it doesn't fit with the times," said Hiroaki Nakanishi, chairman of both the Japan Business Federation (Keidanren) and Hitachi Ltd.
The government, for its part, is also promoting online application procedures in its measures to support businesses.
Major hanko seal manufacturer Shachihata Inc., which offered a free electronic stamp service for a limited period of time, has received as more than 150,000 applications for the service as of the end of April.
"Those using electronic signatures will also need to develop measures to address cybersecurity threats," Ryosuke Sasaki of PwC Consulting LLC said.
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