When it comes to money, people in Japan are old-fashioned. Even though the country is famous for its modernity, people prefer to pay in cash, even in the dazzling metropolis of Tokyo. The Japanese government would like to change that.
Anyone who has traveled to Japan as a tourist knows how important cash is in many situations. At many shrines or temples, but also at small street food stalls and even in some large shops, payment with credit or debit cards is often not possible.
Cash ratio in international comparison
But even if cashless payment options are available, most people in Japan prefer coins and notes. This is shown by current figures: just 39.9% of all payments in 2023 were made cashless.
In international comparison, Japan lags far behind other countries. In the USA, for example, the cashless rate is 53.2%, in Germany 49%. Cash hardly plays a role among Japan’s neighbors: in China, 83.8% of all payments were made digitally, and in Korea the figure was as high as 95.3%.
In 2019, the figures in Japan were significantly lower at 26.8%. It was only the Corona pandemic and the associated restrictions that gave cashless payments a boost. Since then, however, the proportion has only increased slowly.
New technologies do not appeal to older people
According to the government, there are various reasons why Japanese people have such difficulty paying without cash. For example, the Japanese, like the Germans, simply have a deep-rooted preference for paying with cash.
Another reason is the aging of society. While young people have little difficulty paying via an app on their ever-present smartphone, older people find it difficult to use the new technologies.
If you have been happy with cash all your life, there is little reason to switch to other payment methods. This is all the more true if these are associated with additional technical hurdles, as is the case with smartphone apps. Card payments are therefore the most popular of the cashless payment methods: 83.5% of payments without cash were made by credit card.
Own payment system for Osaka Expo
Far behind are payments with QR codes (8.6%) and payment services (5.1%). Debit cards, which are widely used in Germany for checking accounts, account for just 2.9% of payment transactions.
The country is now working on measures to increase the rate of cashless payments. It is expected to reach 40% by 2025 – a goal that will probably be easily achieved. But then it will become difficult: at some point, according to the Japanese Ministry of Economic Affairs, 80% of all payments will be made without cash.
The ministry has deliberately left open the question of when this will happen – but if you look at the developments of the last few years, it could well take several decades to reach this goal. In the meantime, major events are being used to promote new payment methods: Japan has introduced its own digital payment system for the Osaka Expo 2025.
