The popularity of cashless transactions -- or using credit cards and e-money instead of cash to pay -- is expected to increase in the nation this year.
Cashless transactions provide consumers with advantages such as a smoother payment process, among other benefits, but they also bring disadvantages in terms of the management of family finances.
In November last year, major food-service industry firm Royal Holdings Co. opened a restaurant, Gathering Table Pantry, in a wholesale district in Chuo Ward, Tokyo. A sign outside the restaurant states, "Cashless" and "No cash."
Only credit cards and e-money such as IC cards for public transportation systems can be used to pay at the restaurant.
"We haven't had any problems so far," said Royal Holdings Managing Director Akito Nonomura.
Patrons can still split the bill, and the restaurant is crowded in the evenings with company employees after work.
Kongobuji temple, the headquarters of the Shingonshu sect at Koyasan in Wakayama Prefecture, introduced the option of paying by credit card courtesy of Square Inc. of the United States in spring last year.
Visitors are now able to purchase amulets and other items at the temple using a credit card, which is an unusual practice for temples and shrines.
"Visitors of course can pay in cash, but we receive very favorable reviews from foreign tourists who do not have small change on hand," said Shigeo Otani, director of the finance division of the temple.
Cashless transactions have been expanding worldwide as well.
The share of cashless transaction-based payments for purchasing goods and services is at least 50 percent in South Korea and China, according to documents from the Economy, Trade and Industry Ministry.
In the United States, the share is over 40 percent, and in Sweden, the central bank is studying issuing the world's first national electronic currency.
The share in Japan, however, is about 20 percent.
"With a high standard of public safety and a limited circulation of counterfeit bills, people can use cash safely in the nation. I think this is why a cashless transaction system is not gaining popularity," said Daisuke Tanaka, senior consultant of Nomura Research Institute. "In Japanese culture, money is used for gifts for funerals, weddings and other special occasions, which could be another reason" for cashless transactions being unpopular.
Meanwhile, a cashless movement has been gradually growing in the nation alongside the spread of the internet and the introduction of IC cards for public transportation fares and other purposes. One example is the Suica card, which was introduced in 2001.
The "mobile wallet" function is also growing popular as mobile phones have become equipped with the function.
"I don't need to take my wallet out of my bag" thanks to the function, a 31-year-old company employee said. "I hardly use cash these days."
The recent cashless trend provides benefits to companies as well.
According to Royal Holdings, the restaurant can save labor power regarding its manager and other employees as they do not need to do certain operations such as preparing change and depositing money at the bank.
The government plans to promote cashless services in the future, with an eye to doubling the share of cashless payment transactions to about 40 percent by 2027.
Meanwhile, financial planner and consumer adviser Shunsuke Yamasaki has warned that cashless transactions will make it harder for consumers to manage family finances. As consumers do not directly hand over cash, their sense of using money weakens, which makes it difficult for them to realize how much they are spending.
In addition, payment by credit card also complicates the handling of family finances as the money is withdrawn from their accounts at a later date, he said.
As installment payments also involve interest charges, the total price of something can become a bit costly.
Thus, Yamasaki advises people to set their own rules -- such as loading money into e-money services just once a week, or putting in only a small amount.
There is also a convenient "auto charge" function with e-money in which when a cardholders' balance reaches a predetermined amount, money is automatically put into it from the holders' bank account.
"[However,] it is important for customers to realize, as much as possible, that they have used money, and they can do that by putting money onto the card, themselves," he said.
Cashless payments when shopping provides customers with reward point services, depending on the purchase price, another benefit for family finances.
"While taking advantage of the convenience and benefits [of cashless payments], I hope consumers will exercise good self-control," Yamasaki said.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
