More than 50 Japanese regional banks in Japan will introduce the new “J-Coin” cashless payment system developed by Mizuho Financial Group Inc. starting in late March. Mizuho Bank will initiate its J-Coin on March 1st and the regional banks will begin to offer the new payment system about three weeks later.
The Japanese government has a goal to double digital payments so they account for 40% of all financial transactions by 2025. The launch of J-Coin by Mizuho and the regional banks is an important step towards this goal and comes at a time when the Japanese government is advocating cashless payments in advance of the 2020 Tokyo Olympics and Paralympics.
J-Coin transactions will be processed through a smartphone app using a QR barcode, a telephone number or the Line messaging app’s personal number for identification. Unlike prepaid smart cards, which are popular in Japan, the J-Coin service allows transactions between individuals and does not require retailers to install dedicated readers at point of sale.
Mizuho Bank has already announced that it plans to join hands with major providers of cashless payment services in Asia, such as China’s Alipay, and observers note that this could see J-Coin become a preferred method of payment among visitors to Japan.
In order to spur acceptance among retailers, Mizuho group will provide J-Coin to retailers with a service fee structure lower than credit card service fees. Appliance retailers such as Bic Camera Inc. and Yamada Denki Co. plan to begin adopting the J-Coin system in April, with other firms like East Japan Railway Co., convenience store chain FamilyMart Co. and restaurant operator Royal Holdings Co. considering joining as well.
Hoping to accelerate the use of cashless payments and help cushion the expected impact of the upcoming tax hike this year, the government will give consumers using cashless methods rebates of 2% on purchases made at convenience stores, or 5% at other small or midsize stores. The rebates will be for a period of nine months, after the consumption tax is raised from 8% to 10% in October.