Japan Looking to Double Digital Payments

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The technology news from Asia often talks about how likely consumers there are to embrace mobile technology, particularly payments.

Those stories often refer to places like China, where adoption rates are significantly higher than in the U.S., for example.

But Japan appears to be a different story.

Historically, Japan has lagged behind its regional counterparts in its adoption of mobile payments. According to Euromonitor International, the value of mobile purchases in Japan grew 17% during 2016, which seems impressive enough unless compared with the growth rate in China, which was 81%.

According to the Nikkei Asian Review, the government of Japan recently announced a goal of doubling digital payments over the next ten years.

The push is part of a broader plan to support fintech, in part to prepare for an influx of foreign tourists – many of whom are likely to want to use their plastic – during the Tokyo Olympics in 2020, the report said.

According to the Nikkei report, cashless payments make up about 19% of the country’s commerce, compared to more than 50% in places like China and South Korea.

“The digital payment wave has not caught on with small businesses in tourist areas, such as shops and stalls along roads to shrines. This is likely due in part to cost burdens: credit card payment terminals initially cost about 100,000 yen ($900) to set up, and come with monthly leasing fees,” the article said.

Nikkei reported that the government plans to help subsidize the infrastructure to help small merchants afford it.

Earlier this year, Bloomberg reported that leading PF Square would enable souvenir and entry fee purchases at a Buddhist temple that is a popular tourist destination there.

The agreement is part of Square’s own effort to establish its footing in the country ahead of the Olympic games, the report said.

Square entered Japan in 2013.

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