Paying contactless in Japan: do people do it?

Some of you might be acutely aware of the Japanese ardour for cash. If you’ve ever travelled to any tourist spot that isn’t in a major city – I know for a fact many Singaporeans do put in effort to research on and visit places like Izu, Shirakawa-go and Hakuba instead of the usual suspects that are Tokyo, Kyoto and Osaka (and, recently, Hokkaido) – you’d know that cash is the main form of payment.

Credit cards (one of my favourite topics, as you know) are getting more and more widely accepted, most probably because of the 2020 Olympics, but to many, especially Chinese (the nationality, not the ethnicity), credit cards are a has-been. I believe it’s the same for Singapore. Cashless payments – Alipay and WeChat Pay, amongst others – are becoming very familiar to people of our generation (I’m 30), and some can even say it’s a way of life now.

A lot of my Singaporean friends who visit me in Japan are actually rather schooled on Japan. They’ve come several times, and they’ve made their own observations about the country. The question I’ve been asked pretty often is why Japan hasn’t gone contactless yet.

Heads up – it has.

I’d say that Japan was one of the first countries to adopt contactless payment. Rakuten Edy (formerly known as ‘Edy’) started in 2001, and was the first form of electronic money in Japan to be launched nationwide. In 2004, FeliCa phones were launched by docomo; these were phones that had the FeliCa chip installed in them (FeliCa chips are also found in eZlink cards, and basically hold the technology that allows us to pay with them) and people could now use their phones as their wallets. This function was called ‘Osaifu Keitai’ (‘wallet mobile phone’) and it has since been adopted by all the other major Japanese mobile phone carriers.

The Suica card, a transport smart card, debuted in 2001, serving the areas that were accessible via stations on JR East lines, and the PASMO, a similar card, came out in 2007. At a certain point in time they could be used interchangeably within the Kanto area, but it wasn’t until 2013 that they could be used nationwide, along with previously region-specific smart cards like the ICOCA, Kitaca, PiTaPa and more. All these make up the catalogue of smart cards that can be used everywhere in Japan (with some exceptions – some private railways and bus companies in Japan are operated by companies that haven’t adopted the smart card technology).

In the past few years, we have had more contactless payment options. Rakuten Pay, Google Pay (formerly Android Pay and Google Wallet), Apple Pay and the O.G., Osaifu Keitai. I’m sure there are more, and I’m not even talking about the non-mobile options like nanaco, WAON and Visa’s PayWave, or the Bluetooth options like Line Pay and Origami. And then there are the pay-later options (i.e. you don’t charge up an account with money before using) like iD and QUICPay.

So. Many. Options. They are here. Some of them have been around for a really time. And they’re probably here to stay. Thing is, why don’t more people use them?

But a lot of people are using them, namely the Suica and the PASMO. I’d say that the Suica is more widely accepted than credit cards, and the fact that you can top them up at any convenience store – not just the train station – doesn’t hurt.

It seems to be a dichotomy. Cash vs all the other cashless options. Most of the time, I carry both.

For the reasons why people don’t use smart cards or transfer funds electronically, I don’t know for sure. I can guess it’s an amalgamation of factors: not enough retailers adopting the technology, not enough people using the technology (Japan has an ageing society, so it’s no wonder that many elderly still prefer cash), maybe even more people not sure of which form of electronic payment to use.

Internet banking is another thing people think people don’t really do here, but they do. I do. I know a lot of people who do. There are even a sizable number of online banks, i.e. banks that have no brick-and-mortar form, but exist only in the digital space. That’s impressive, don’t you think? For a cash-based society to have so many banks that you cannot physically visit? You know, I want to say it’s the dichotomy at work, but I have another theory: it’s not that the usage is non-existent, or that cash users are paranoid mules mired in Ye Olde Ways of Banking. It’s just that the uptake is incredibly, unfortunately slow. Japan is taking years upon years to embrace this technology it has integrated into its financial infrastructure a long time ago. It’s quite painful to watch, but good thing I’m already on the other side.


Addendum

I recently switched over to Google Pay because I finally changed my phone – my previous phone was too old to accommodate Google Pay – and have started using Mobile Suica. I charge it with my credit card and use it mainly for transport, but I’ve used it to pay when Suica is an option. I don’t use any of the QR code payment options by choice – I already have a pretty obvious digital footprint, so with money I feel I really should be more careful.


Re: my previous post

KL left me the best comment ever on my previous post about my cosmetic surgery experiences that contained a reference to the phrase ‘live long and prosper’.

Auntie! “Live long and prosper” is Star TREK, not Star Wars! >< That was probably more triggering than you talking about cosmetic surgery. 😛

You can see my reply, but basically I was SO amused that I got it wrong in such a perfect way because I care about neither. There is no way a non-fan such as myself could have gotten it more wrong, and I am so proud. 50 points to whichever Hogwarts house KL is from! Thanks for pointing it out.

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