Japan’s top three banks have come together to drive the push towards cashless. Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Financial Group aim to unify a QR code specification in an effort to standardize a smart phone QR-based payment system across the participating banks, according to Nikkei Asian Review.
Slated for fiscal 2019, the plan is to establish a jointly financed company, among the three banks, to oversee the initiative.
Japan, usually behind its regional counterparts in the adoption of digital, has established a lot of momentum lately in the push towards cashless. As previously reported on by PaymentFacilitator, the Japanese government slated an aggressive goal of doubling digital payments over the next 10 years – beginning in 2017.
But even now, the Nikkei Asian Review article cites U.S.-based Boston Consulting Group data reporting that 65 percent of payments in Japan are still settled with cash – this being double the average for the neighboring nations. Reports also show credit cards are used in less than 20% of transactions.
Amidst these discouraging numbers, according to the same article, the Bank of Japan shares comparative data with 98% of Chinese urban area mobile users consistently transacting via mobile payments. What’s at the heart of China’s mobile success?
Alipay is currently the provider of choice in China. This means QR code functionality is at the core of these impressive numbers for the Chinese economy. And China isn’t the only country benefiting from the ease and efficiency of QR-based payments.
Why all the attention on QR-based payments? Part of the appeal of a QR code-based mobile POS solution is its simplicity. There is no need for merchants to invest in expensive POS infrastructure.
As for Japan, Nikkei Asian Review said the attachment to cash has translated to expenses associated with cash payments, such as transport costs, climbing to an estimated 2 trillion yen annually. In response to this market need, local messaging app provider Line has introduced Line Pay and NTT Docomo will launch its own version of QR-based payments this month.