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Japan’s passion for cash

Categories : Cash generates security, Cash is a public good, Cash is efficient
November 13, 2018
Published in : Cash, Efficiency, Japan
The Japanese government might be concerned about its citizens’ love of cash as it pushes for alternative payments, but this passion can be justified.
Communication Team

The Japanese are the Germans of Asia when it comes to their attachment to cash. Indeed, if non cash payments in South Korea and China are equal to 98% and 60% of transactions respectively, that figure is only 18% in Japan.

The Japanese are extremely loyal to the yen but that doesn’t mean that their payments are completely analog: the Nippon Island has a well-developed and widespread e-commerce network, public transport is settled with pre-paid cards and credit cards are often used for shopping splurges.

Yet, the Japanese still cherish the use of notes and coins – which might actually be beneficial for their brains. Indeed, writing for Japan News, Noriko Hama concludes that cash payments force consumers to calculate: when stuck with a large denomination, one has to think about how to break it up before an upcoming dinner with friends, for example, or how to pay for a coffee more efficiently in order to get rid of loose change. Dealing with notes often requires sorting, calculating, forecasting and budgeting – all the processes that are automatized or eliminated when making digital payments.

But those aren’t the only benefits of cash payments. Notes and coins offer security. For instance cash ensures that the money you stashed is safe in the event of a bank collapse, an account freeze or political sanctions. Also, it minimizes scrutiny and control over how you spend your money, eliminating the Big Brother effect. So, what can ultimately be deduced it that Japanese’s loyalty to cash is reasonably justified.