Cash Usage Trends in Japan
A study published by Hiroshi Fujiki and Kiyotaka Nakashima entitled Cash Usage Trends in Japan: Evidence Using Aggregate and Household Survey Data finds that the decrease in cashMoney in physical form such as banknotes and coins. More demand due to the increase of credit cards in both day-to-day transactions and regular payments would have a very modest impact in Japan.
The research paperSee Banknote paper. More examines the trends in cash usage in Japan vis-à-vis non-cash paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More options including credit/debit cards, electronic moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More and bank transfers using both aggregate and individual household survey data.
The study gathered enough data to calculate and infer the maximum impact of any possible decreases – amounting to at most 0.45% for regular payments and a 0.51% decrease in the total cash circulation in Japan. Key insights of the report conclude that cash hoardingThe term refers to the use of cash as a store of value. However, the term has a negative connotation of concealment, and is often used in the context of the war on cash. See Precautionary Holdings. More accounts for as much as 42% of total cash circulation in Japan. Moreover, empirical evidence suggests that the possible decrease in cash demand from the substitution of cash for non-cash payment methods for day-to-day transactions would not be very large.
Read the full report below:
Cash Usage Trends in Japan: Evidence Using Aggregate and Household Survey Data