Japanese, as a people, are addicted to cash, coins and all kinds of physical payment systems. It is not uncommon in the rural areas of Japan to see older citizens carrying $5,000 (in yen) in cash to go shopping for new wedding presents for young family members – because carrying cash to buy kitchen appliances or furniture makes sense.
Well, the Japanese government is now encouraging the population to change habits and move to a cashless society, with a goal of doubling the number of cashless transactions by 2025. Currently, the number of transactions in Japan in which hard cash is used is about 65 percent. And in Tokyo, a modern interconnected city of 35 million with state of the art transportation and communications, about 60 percent of the restaurants accept cash only – yes cash payment, no credit cards. The number of cash payments in most advanced economies is about 32 percent – about half that of Japan.
This cash based society is now costing people time and money. The Nomura Research Institute reckons that the physical cash payment system costs Japanese society – with a shrinking population – about $15 billion dollars a year in lost time and investment in physical assets for cash, this would include old style cash registers and other machines.
Still, some super markets and even health clinics not only accept cash but prefer cash payments. Food and grocery shopping for a family of four could cost $300 to 500 in US dollar terms and people walk in with a pocket full of cash to fill their home with food. It is said that Japanese love hard cash because of anonymity, a sense of hard ownership and even earthquakes. Think about a major earthquake, systems go down and the 10,000 yen note (about $100 US dollars) is suddenly king – it has meaning.