Half of Japan's regional banks to back Mizuho Bank's new cashless payment system
About half of around 100 regional banks in Japan will introduce a new cashless payment system developed by Mizuho Financial Group Inc. starting in late March, sources close to the matter said Saturday.
Mizuho Bank will launch the J-Coin service on March 1, with the regional banks following suit from March 25, they said.
The plan to join the Tokyo-based mega-bank’s J-Coin initiative comes at a time the government is pushing to expand the use of cashless payments ahead of the 2020 Tokyo Olympics. Japan’s aim is to double digital payments so they account for 40 percent of all financial transactions by 2025.
J-Coin transactions will be processed through a smartphone app using either a “Quick Response” two-dimensional barcode, a telephone number or the Line messaging app’s personal number for identification.
Unlike prepaid smart cards, which are currently more popular in Japan, the J-Coin service allows transactions between individuals and does not require retailers to install dedicated readers.
Since Mizuho plans to join hands with major providers of cashless payment services mainly in Asia, such as China’s Alipay, J-Coin could be an attractive alternative for rapidly increasing foreign visitors as cash continues to be the most frequently used form of payment by consumers in the country.
The new service will initially be offered to individuals holding accounts at regional banks, such as Chiba Bank and Nishi-Nippon City Bank, according to the sources.
Appliance retailers such as Bic Camera Inc. and Yamada Denki Co. will start 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.
The Mizuho group hopes to increase the number of companies adopting the service by requiring them to pay lower fees than credit card services.
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 percent on purchases made at convenience stores, or 5 percent at other small or midsize stores, for nine months after the consumption tax is raised from 8 percent to 10 percent in October.
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