Cash Remains King In Ageing Japan

I remember using stored value cards for transport purchases in Tokyo almost 20 years ago. Yet today’s ageing Japan is lagging behind other major economies in the adoption of electronic payments.

Ageing Japan

The answer may lie in the fact that Japan is a super-aged society with more than 28 percent of people 65 or over. Fears persist over security and there’s a general reticence to change. (See Case #2 below).

PayPay offers a 10-percent discount for diners
PayPay Japan

Security concerns

Despite being a virtually crime-free society, people feel more comfortable carrying cash and consumer response to e-payments has been sluggish.

According to this article in Firstpost, this is a serious challenge in a country with more than 200,000 ATMs and where most small shops will only take cash to avoid high transaction costs.

Many people were also put off when retail giant Seven & I Holdings suffered a hacking attack immediately after launching a new QR-code payment system and was forced to scrap the scheme.

Hard habits to break

The Firstpost article also states that in Japan, four out of five purchases are still made with cash, despite its reputation as a futuristic and innovative nation.

In South Korea, some 90 percent of transactions are digital, while Sweden aims to be a cashless society as early as 2023.

What can an ageing world learn from ageing Japan?

Older consumers tend to be loathe to change their habits unless they see a real benefit. The failure of many digital inclusion programs aimed at older adults around the world is testament to this.

Case #1

We worked with a major internet provider who wanted to recruit older ‘stay-at-home’ retirees to soak up off-peak internet. As we discovered through a series of one-to-one interviews, the key selling point was not ‘access to the internet’ but enabling Skype calls with their family members.

Case #2

We performed Age-Friendly Audits on a range of simplified new remote control devices for a leading cable TV company. Ultimately, the older customer preferred to remain with the existing remote device because it was ‘familiar’. The users knew which buttons they needed and dare not touch those they didn’t.