Nearly 20% of Japanese households use electronic money, but “cash is king” is still deeply rooted

Nearly one in five Japanese households use electronic money for small purchases, up from a year ago, according to a survey by a research institute affiliated with the Bank of Japan, suggesting a loosening of Japan’s cash-heavy culture. According to the survey, released on Monday, 18.5 per cent of Japanese households said they would use electronic currencies such as smartphone apps and debit cards when spending no more than 1,000 yen ($9.17) per purchase, up from 15.4 per cent the year before.

The survey will be conducted from June to July.

Nearly 20% of Japanese households use electronic money, but "cash is king" is still deeply rooted

The proportion is much higher among single households in their 20s and 30s, at 35.6 per cent, suggesting that the government’s efforts to encourage cashless Japanese may be paying off, at least among the younger generation.

Despite the growth of electronic payments, Japan’s “cash is king” mentality remains entrenched, with surveys showing that 84% of people still use paper money and coins in small purchases. For payments of more than 10,000 yen and less than 50,000 yen, 48.5 percent of households said they paid in cash and 3.4 percent in electronic money, according to the survey.

Low crime rates, years of ultra-low interest rates and a nationwide network of ate machines have made cash attractive in Japan, leaving little reason to switch to cashless payments.

Japanese Prime Minister Shinzo Abe is pushing more Japanese to switch to cashless payments so that stores can automatically estimate sales and banks can cut back on expensive ATMs.

To allay the pain of the October 1 sales tax hike, the government has launched a tax rebate scheme to encourage consumers to forgo cash in favour of electronic money.

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