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 cash 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 paper examines the trends in cash usage in Japan vis-à-vis non-cash payment options including credit/debit cards, electronic money 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 hoarding 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: