For the first time at Japan's Fuji Rock Festival this summer, concert goers like 37-year-old information technology worker Ai Okuyama were able to use tap-to-pay cards to buy food and beer as they mingled amid performances by Beck and the Red Hot Chili Peppers.
"It was convenient to skip the process of taking my wallet out, getting money out, putting change back in, and putting my wallet back in my bag," said Okuyama, "especially because you normally have a beer in one hand so you have to do it all with the other."
Rock music fans and the other 60 million holders of the cards issued by East Japan Railway Co are blazing a trail toward a cashless future in Japan, a nation where people still walk into stores with 100,000 yen ($980) in cash to buy a television. The train operator, known as JR East, wants to help break the country's attachment to banknotes and coins by getting more and more people to use its Suica cards for uses beyond transportation. On the agenda: pushing their use at rock concerts, beer festivals and sightseeing spots to grab a bigger share of Japan's growing e-payments market.
"Over the past 30 years in Japan, I have seen the incremental whittling away of cash as king as credit cards have gained popularity, and now Suica and other prepaid cards are transforming how consumers settle their bills," said Jeff Kingston, director of Asian Studies at Temple University in Japan. "So we are trending towards a way less cash-oriented society."
JR East is seeking to expand its e-money system 39 per cent to as many as eight million transactions a day by 2020, according to Hajime Yamada, head of the company's Suica business. Reaching the target may be helped by its recent agreement with Apple Inc to include Suica on the latest iPhone, letting consumers pay for transport by swiping their phones. Competing cards including ones issued by retailers, such as Aeon Co's Waon and Seven & i Holdings Co's Nanaco, can be used at convenience stores and supermarkets and offer loyalty points. Another card, Pasmo, works on train networks and at most stores that accept e-money.
"I want Suica to be number one in e-money in Japan in terms of transaction numbers,'' said Yamada. "I really want Suica to be the first thing people think of when they talk about e-money.''
Commuter passes and other contactless cards equipped with Sony Corp's FeliCa mobile payments technology were used for 4.6 trillion yen in transactions in 2015, up 16 per cent, according to the Bank of Japan. That's double the increase in credit card transactions of 7.7 per cent to 49.8 trillion yen, Japan Consumer Credit Association data show.
"Credit cards have become far more ubiquitous and accepted, shifting from the outlier to a mainstream mode of payment," said Kingston of Temple University, citing convenience stores' increasing acceptance of e-payments and the growing use of PayPal, as well as online banking and stock trading. "All across the board we see that cash is shrinking in importance for everyone under 60."
"It was convenient to skip the process of taking my wallet out, getting money out, putting change back in, and putting my wallet back in my bag," said Okuyama, "especially because you normally have a beer in one hand so you have to do it all with the other."
Rock music fans and the other 60 million holders of the cards issued by East Japan Railway Co are blazing a trail toward a cashless future in Japan, a nation where people still walk into stores with 100,000 yen ($980) in cash to buy a television. The train operator, known as JR East, wants to help break the country's attachment to banknotes and coins by getting more and more people to use its Suica cards for uses beyond transportation. On the agenda: pushing their use at rock concerts, beer festivals and sightseeing spots to grab a bigger share of Japan's growing e-payments market.
"Over the past 30 years in Japan, I have seen the incremental whittling away of cash as king as credit cards have gained popularity, and now Suica and other prepaid cards are transforming how consumers settle their bills," said Jeff Kingston, director of Asian Studies at Temple University in Japan. "So we are trending towards a way less cash-oriented society."
JR East is seeking to expand its e-money system 39 per cent to as many as eight million transactions a day by 2020, according to Hajime Yamada, head of the company's Suica business. Reaching the target may be helped by its recent agreement with Apple Inc to include Suica on the latest iPhone, letting consumers pay for transport by swiping their phones. Competing cards including ones issued by retailers, such as Aeon Co's Waon and Seven & i Holdings Co's Nanaco, can be used at convenience stores and supermarkets and offer loyalty points. Another card, Pasmo, works on train networks and at most stores that accept e-money.
"I want Suica to be number one in e-money in Japan in terms of transaction numbers,'' said Yamada. "I really want Suica to be the first thing people think of when they talk about e-money.''
Commuter passes and other contactless cards equipped with Sony Corp's FeliCa mobile payments technology were used for 4.6 trillion yen in transactions in 2015, up 16 per cent, according to the Bank of Japan. That's double the increase in credit card transactions of 7.7 per cent to 49.8 trillion yen, Japan Consumer Credit Association data show.
"Credit cards have become far more ubiquitous and accepted, shifting from the outlier to a mainstream mode of payment," said Kingston of Temple University, citing convenience stores' increasing acceptance of e-payments and the growing use of PayPal, as well as online banking and stock trading. "All across the board we see that cash is shrinking in importance for everyone under 60."
© Bloomberg