Why is Japan cash only?
Assessing the reasons why Japanese consumers prefer cash, Statista notes its security and reliability are highly valued. Over 55 percent of respondents cited concerns over personal information leakage as being a major drawback of cashless options.
Most common reasons for paying with cash in Japan 2024
Around 44.4 percent of respondents stated they used cash because it is accepted at most places. The second-largest share of respondents reported using cash because the payments are completed on the spot.
How cash-centric is Japan? Even though Japan is technologically among the top countries in the world, cash is still the primary payment method. Statistics show that over 60 percent of all payments are made in cash. It's thought to be a more reliable and secure option, without the danger of personal information leakage.
In 2023, cashless payments accounted for around 39.3 percent of the private final consumption expenditure in Japan. The cashless payment ratio increased by 3.3 percentage points year on year.
Generally, credit cards in Japan are used for a smaller share of transactions, with a higher average amount, and with less borrowing per transaction. The costs to merchants that take the cards and the rates of fraud also are noticeably higher in Japan than in the United States.
“The Japanese government attempted to push the use of cashless transactions in 2019, setting the target of having 40% of transactions being made via credit cards, debit cards or e-money in time for Expo 2025 Osaka, and with the future aim of reaching 80% of all transactions,” explained the article.
Assessing the reasons why Japanese consumers prefer cash, Statista notes its security and reliability are highly valued. Over 55 percent of respondents cited concerns over personal information leakage as being a major drawback of cashless options.
In Japan, it's not common to tip for services such as those provided in bars, cafes, restaurants, taxis, and hotels. However, there is a custom in Japan of giving a gratuity, called ""kokorozuke"", (coming from the heart), in some situations. There are certain situations where tipping might be considered appropriate.
With digital payments accounting for around 36 percent of the private consumption expenditure in 2022, cash is still considered king in the country. Aiming to increase the cashless payment ratio to 40 percent by 2025, the government has actively promoted cashless payments in recent years.
Faxes are sent over telephone lines, so they are seen as safer than email, which can be hacked. But another big reason is that many of Japan's businesses and government offices still keep paper documents and use personal seals, called hanko, which are used instead of signatures.
What country is nearly cashless?
Norways is the most cashless country, with only around 2% of payments being made by cash, and 100% of the population having a bank account.
As of June 2023, about 943 million people in mainland China used mobile payments, bolstering the country's status as the world's largest cashless society.
In the years following World War II, the Japanese government tightly controlled domestic financial markets in pursuit of its reindustrialization goals. The government shaped regulations in a way that would drive up household savings and divert these savings into bank deposits.
For example, if you are traveling from the U.S., wait to exchange your dollars for yen until you have arrived in Japan. However, you will get the most favorable rates for yen in Southeast Asian countries rather than in Japan.
Spending Money | 1 week | 2 week |
---|---|---|
Budget | ¥55,000 | ¥105,000 |
Mid-Range | ¥135,000 | ¥270,000 |
Luxury | ¥340,000 | ¥680,000 |
The most common form of cashless payment available for foreign tourists is a Visa/Mastercard credit card, specifically when using the chip. Contactless credit card payment, aka “Paywave” or “tap”, exists but is still relatively rare (usually found in larger department stores such as Marui).
The concept of a cashless society has been around for decades. But with 80% of payments in the US being made digitally in 2022, and four in ten of us ditching change altogether, research suggests that the transition from physical currency could take place sooner than we once thought.
In most restaurants you are supposed to bring your bill to the cashier near the exit when leaving, as it is not common to pay at the table. Paying in cash is most common, although more and more restaurants also accept credit cards or IC cards such as Suica.
Japan's digital payment apps. Using smartphone-based apps for payments has a few advantages. First, they're often accepted at small stores that take cash but don't accept credit cards. Second, they're great if you can't get a credit card—either because you're a foreigner or you're too young.
Decreased Monetary Security
When you have cash in hand, you know it's safe from everything except direct robbery or physical destruction. But when your money is in digital form, it's vulnerable to hackers and system malfunctions.
Why are people against cashless?
When you pay digitally, you always leave a digital footprint, and this footprint is easily monitored by financial institutions. Understandably, consumers are uneasy about their data being harvested or tracked by big businesses. Many people also feel that cashless spending is more difficult to control.
You may be surprised at how many places accept cash only, so it's a good idea to bring enough currency or withdraw money when you arrive, especially if traveling with a large group. Most major Japanese banks accept international cards at their ATMs. Post office ATM are another option.
Yes, drinking water from taps in Japan is safe. For environmental reasons, try to use a refillable water bottle rather than buying bottled water whilst travelling in Japan. Metro train stations have public water fountains, but otherwise these can be hard to find (this is the land of vending machines after all).
Not finishing one's meal is not considered impolite in Japan, but rather is taken as a signal to the host that one wishes to be served another helping. Conversely, finishing one's meal completely, especially the rice, indicates that one is satisfied and therefore does not wish to be served any more.
Do Japanese people say arigatou? Yes, they do! Arigatou on its own is a simple, somewhat casual “thank you.” That said, most people prefer doumo arigatou or arigatou gozaimasu as their standard way of saying thanks, because both of those phrases are more polite than arigatou on its own.
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