WHY JAPAN STILL USES CASH
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Businessman counting money, japanese yen banknotes, in front of laptop computer at working desk [PHOTO SOURCE: https://www.freepik.com/premium-photo/businessman-counting-money-japanese-yen-banknotes-front-laptop-computer-working-desk_5887107.htm] It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for. - Robert Kiyosaki [PHOTO SOURCE: https://www.azquotes.com/quote/527418] |
On this date, June 27, 1871, The Japanese Yen was officially adopted by the Meiji government in an act signed on that date. I will post this article on why the Japanese people love cash and they will never go cashless.
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“When you have money, think of the time when you had none.” - Japanese Proverb [PHOTO SOURCE: https://www.facebook.com/pesosenseph/photos/when-you-have-money-think-of-the-time-when-you-had-none-japanese-proverbpesosens/312216225629801/] |
Why Japan Still Uses Cash
Friday, October 26, 2018
Japan’s Love Affair with Cash
[Updated July 2019]
Japan is often romanticised as a technologically savvy futuristic land, and the obvious breeding grounds for a robot revolution, so then why is this tech obsessed country still resisting the global migration towards cashlessness? Every travel blog on Japan reminds tourists to always have cash on hand but also assures there is always an ATM nearby; a reality that mystifies both tourists and foreign residents alike. Especially since Japan’s Asian neighbours are sprinting away from cash as fast as they possibly can. But the Bank of Japan and the government seem to teeter between accepting the status quo and understanding the inevitability that electronic money is the way of the future.
To be fair, alternatives to cash aren’t scarce in Japan. Credit card ownership per capita is on par with other “advanced economies” as outlined in a report by the International Statistical Institute in 2017. The number of credit cards issued per inhabitant is around 2.8, the same as Australia, the UK and the US, but China is leading the pack with an average of 4 cards per adult. In addition, prepaid cards like Suica, Pasmo, & Icoca are easily accessed and readily used for transportation or nominal purchases (e.g. at a convenience store), and online banking is commonly utilised for monthly payments like rent and utilities. However, if we look at the amount currency in circulation, Japan tops the charts with cash transactions accounting for nearly 20% of GDP and at the opposite end is Sweden with a mere 2%. Even looking at emerging economies like South Africa and Brazil, cash transactions account for less than 5% of GDP making Japan quite the anomaly.
There are no officially declared reasons for why Japan remains a heavily cash based economy, but what is clear is that both individuals and institutions are propping up a system that is mutually beneficial and there have been few meaningful incentives to disrupt the country’s addiction to cash...
But if we were to make a list, here are some of the main reasons.
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Wealth gained hastily will dwindle, but whoever gathers little by little will increase it. – Proverbs 13:11 (ESV) Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it. – Proverbs 21:20 (ESV) “Financial discipline demands that you have a budget. Control your money. Do not let money control you. Discipline yourself to make sure that the flow of your money is going in the right direction at all times.” — Noel Jones [PHOTO SOURCE: https://www.dreamstime.com/japanese-yen-notes-money-concept-image204496275] |
Tansu-Yokin
The Japanese version of “saving money under your mattress,” but instead of a mattress it’s a dresser. The Dai-ich Life Research Institute estimates the amount of tansu-yokin was around 43 trillion yen (380 billion USD) in 2017. Decades of low or even negative interest rates, paired with risk averse attitudes to investment meant the safest place to keep one’s savings was in the home.In addition, jolts of economic insecurity during the oil crises in the 70s, the bursting of Japan’s economic bubble in the 90s and the financial crisis in 2007 is not lost on Japan’s ageing population. So despite conventional economic wisdom to diversify investments, there seems to be a sense of security in the tangibility of cold hard cash.
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Money is only a tool, not a goal. – Amish Proverb [PHOTO SOURCE: https://suzannewoodsfisher.com/amish/too-much-money/] |
ATMs
ATMs are just as common as vending machines in Japan. As of late 2016 there were over 200,000 ATMs throughout the country as reported by Nikkei Asia Review; a direct result of customers demanding easy access to cash. And, the benefit for financial institutions comes in the form ATM fees as detailed by Toyo keizai earlier this year. For example, 99% of Seven Bank’s net profit of26.1 billion yen (232 million USD) was earned from ATM fees, and regional banks generate 13% of their revenue from ATM fees as well. Even though maintaining ATMs is an expensive affair, both institutions are the populous are seemingly willing to bare the costs for the sake of convenience.
Small Businesses
The clichéd saying, “small businesses are the backbone of the economy,” is in fact true in Japan. Family or individually run stores, restaurants, and other business are ubiquitous throughout the country. Often, these establishments can’t afford to or simply refuse to pay heavy credit card charges and thus operate in cash, and since the average person walks around with notes and coins in their wallet, not accepting credit cards doesn’t negatively affect business. In addition, it is commonly known that these small business often claim losses or minimal profit in order to minimise income taxes; these Shōwa Era practices can only be maintained if business is conducted in cash.
Safety
The three points above all require people to move around with and store wads of cash, and this can only be possible if the country is safe enough to do so, which it is. Because the number of pick pockets, break-ins, and overall theft is low, people don’t feel uncomfortable walking around with tens or even hundreds of thousands of yen (hundreds or thousands of dollars). Even if a wallet is lost, it is most often returned with all the cash still inside. The safety of the country cannot be overlooked as a key reason why Japan hasn’t felt the urgency to make daily transactions digital.
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Money grows on the tree of persistence – Japanese Proverbs [PHOTO SOURCE: https://resilientblog.co/inspirational/quotes-about-money-and-wealth/] |
Natural Disasters
In the summer of 2018 alone, Japan experienced a myriad of natural disasters, from earthquakes, to heavy rains and typhoons both of which brought flooding to large residential and commercial areas. Each of the natural disasters came with power outages, some lasting for days. And no electricity means no electronic money. Japan’s residents are routinely advised to prepare emergency kits with essentials like food and bottled water, and one that cannot be overlooked is cash. Once again, we circle back to why there is a sense of security in having cash accessible at home.
Fundamentally, the pervasiveness of cash has reinforced the convenience of using cash. Online retailers offer a COD (cash on delivery) service while airlines, phone companies, concert promoters and even the government issue payment slips with a barcode that can easily be paid at a local convenience store, in cash. Taxis and small retailers don’t scowl at the sight of breaking a 10,000 yen note, and payment machines on public transportation also make change. So for the average consumer it’s difficult to see the drawbacks of using cash when the system is explicitly designed to make the use of cash painless. What’s additionally important is that maintaining a level of anonymity is extremely valued in Japanese society and cash transactions allow for that.
As the rest of the world increasingly views cash as a nuisance, Japan has done away with many of the inconveniences of cash and has found a happy medium. Sure, maintaining a cash based economy is incredibly expensive and also inconvenient for tourists, so looking towards the 2020 Olympics Japan knows it needs to become more e-money friendly as the Economist pointed out in 2017. McDonalds reportedly started accepting Visa and MasterCard at the end of last year and Banks are trying to reduce maintenance fees for ATMs, but only time will tell if Japan’s consumer will feel comfortable enough to have their personal data linked to every yen they spend.
https://izanau.com/article/view/cash-japan
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More than 5,000 people signed a petition calling for the council to reverse a decision to go cashless at its facilities.(ABC Far North: Kristy Sexton-McGrath) [PHOTO SOURCE: https://www.abc.net.au/news/2023-04-19/online-petition-cairns-council-cashless-payments-overturned/102241700] |
Keep your bank book and credit cards somewhere easily accessible. Also, keep important documents (like residence cards, my number cards, marriage/birth certificates, etc.), or at the very least copies of all your important documents, inside the kit. They will be important for identification (in particular if you are a foreigner living in Japan). Also, getting lost/destroyed documents reissued would be difficult, especially during an emergency.
You will also probably not be able to withdraw money from ATMs or banks during an emergency, so you should keep some cash on you, just in case you need to make purchases. The recommended amount is between 10,000 and 100,000 yen. Keep the documents and cash in a strong, waterproof plastic bag.
https://jobsinjapan.com/living-in-japan-guide/10-must-have-items-for-your-earthquake-emergency-kit/
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Australian $5 dollar notes [PHOTO SOURCE: https://www.ebay.com.au/itm/253388378930] |
Kuchikomi:
When disaster strikes in the 'cashless' era, there's no substitute for
old-fashioned money
Oct. 10, 2019 07:10 am JST 9 Comments
TOKYO
Typhoon No. 19, named Hagibis, is still a couple of days from hitting land, but
its potential for destruction is already being compared in the media with last
month's No. 15, which wreaked havoc on large swaths of Chiba Prefecture in
early September. At the peak, 930,000 households were without power — a
situation which a writer for Nikkan Gendai (Oct 5) inadvertently described as
"shocking". At night neighborhood streets were left in the dark, and
refrigeration units failed in both private homes and stores. Even worse, banks
could not open and people could not access their accounts at ATMs. Nor could
they use prepaid cards when the power was off.
So yes, reports Nikkan Gendai, it's probably a good idea to keep some money
handy in case of power blackouts. One drugstore in Chiba, for example, managed
to get open for business, but its electronic cash registers did not function,
so it had no choice but to limit sales transactions to cash. At convenience
stores and supermarkets the situation was the same. Cash was king; credit cards
and prepaid IC cards were rendered useless.
“He who laughs at one
yen will weep at one yen.” https://www.jrpass.com/blog/everything-you-need-to-know-about-japanese-yen-when-traveling https://thesamuraiseven7.blogspot.com/2023/06/why-japan-still-uses-cash.html This
#TravelMoneyTip
is from our FXpert Theo from our Travel Money Oz Frankston store! [PHOTO
SOURCE: https://www.facebook.com/photo?fbid=811709944324292&set=a.696749362487018]
Japan is very much a coin-based economy rather than
note-based. They usually would give out two 500 yen coins as change rather than
a single 1000 yen note, so make sure you pack a coin purse!
These coins come in very handy for vending machines, and
are also used as prayer offerings in shrines and temples 
You'll also find lots of arcades and Hyaku-en shops like
Daiso (hyaku-en meaning 100 Yen, or what we'd call a dollar discount store in
Aus) to spend your coins in too! 
SHOP JAPANESE YEN: https://www.travelmoneyoz.com/exchange-rate/jpy
"I myself, my parents and siblings live in Hokkaido, and I heard many
tales of woe from people there following the big earthquake that struck last
year," financial planner Hiromi Sekiguchi told the tabloid. "One
simply can't rely on 'cashless' transactions in case of emergencies. You have got
to keep some cash on hand."
How much cash? To be safe, for a household consisting of parents and two
children, living expenditures for say, four to five days might come to "as
much as 100,000 yen," says Sekiguchi. Of course some risk is entailed in
holding onto that much money, since if the house were to be inundated by
flooding or — god forbid — collapses, the money will be buried in the rubble.
"If you're concerned, then make it half — 50,000 yen," she
says.
"In an emergency most shops might not be able to make change from larger
bills, so it's better to keep at least part of the money in 1,000-yen notes or
coins," Sekiguchi added.
Ryoichi Yoshida, a disaster consultant who survived the Great East Japan
Earthquake and Tsunami in March 2011, advises that a person living alone should
budget at least 2,000 yen per day for one week.
"If you've got extra money, then make it 3,000 yen per day, for seven days
worth," he recommends. "In addition to 15,000 to 20,000 in your
wallet, you ought to keep some extra in another place. And be sure to have some
personal ID like a driver's license on hand too, as places like hospitals will
accommodate you if can show some ID."
Should you run out of cash, the postal system will allow you to send cash
through registered mails, which is likely to reach you fairly quickly as long
as transport network is functioning.
The remarkable efficiency of the post office and parcel delivery services can
generally be relied upon, even in cases of emergency. On the fourth day of the
blackout, a drugstore in Kamogawa, Chiba Prefecture, said it was able to
receive next-day parcel deliveries containing cash sent from within Tokyo's 23
wards.
The main thing to keep in mind is that the possibility of losing cash is
probably far less than the likelihood that you'll be able to depend on your
cell phone, ATM card, credit card and IC card for payments in the event the
power goes off. And even if you can find an ATM that's operating, getting funds
from it might involve waiting in a long queue for a considerable
duration.
So consider cash a reliable safety net, the writer advises.
© Japan Today
https://vk.com/wall543023742_232
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It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for. - Robert Kiyosaki [PHOTO SOURCE: https://www.azquotes.com/quote/527418] https://thesamuraiseven7.blogspot.com/2023/04/robert-kiyosaki-on-budgeting-your-income.html
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You don't have to be a mathematician to have a feel for numbers. - John Forbes Nash, Jr. https://thesamuraiseven7.blogspot.com/2023/06/why-japan-still-uses-cash.html Japanese Yen in bag [PHOTO SOURCE: https://www.istockphoto.com/photo/japanese-yen-money-bag-gm869610252-144784709] |
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Happiness comes from spiritual wealth, not material wealth... Happiness comes from giving, not getting. If we try hard to bring happiness to others, we cannot stop it from coming to us also. To get joy, we must give it, and to keep joy, we must scatter it. Japanese Yen packed in suitcase [PHOTO SOURCE: https://www.actionforex.com/contributors/technical-analysis/524229-japanese-yen-eyes-potential-intervention-amid-rising-usd-jpy/] https://thesamuraiseven7.blogspot.com/2023/06/why-japan-still-uses-cash.html |
RELATED LINKS:
https://www.richdad.com/giving-back
https://thesamuraiseven7.blogspot.com/2023/03/the-one-wallet-economy-of-konohana.html
https://thesamuraiseven7.blogspot.com/2023/04/robert-kiyosaki-on-budgeting-your-income.html
https://thesamuraiseven7.blogspot.com/2023/04/my-kakeibo-journal-part-1.html
https://en.wikipedia.org/wiki/Japanese_yen
OTHER LINKS:
https://www.cashmatters.org/blog/cairns-council-cancels-cashless-crusade
https://thesamuraiseven7.blogspot.com/2023/03/the-7-guiding-principles-of-konosuke.html
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