Discussion by Study Group on the Future Direction of Cashless Payment Summarized

1. Background

Based on the Cashless Vision formulated in April 2018, METI is working to promote cashless payments with the aim of increasing their ratio to around 40% by 2025. 

To date, the Japanese government has encouraged both stores and consumers to use cashless payments through point reward programs, and the payment method is steadily spreading throughout society, with the cashless payment ratio reaching 32.5% in 2021. In March 2022, a report compiled by the Study Group on Developing the Environment with a View Toward Furthering the Spread of Cashless Payments among Small and Medium-Sized Stores concluded that in order to further expand the use of cashless payments, it is necessary to simultaneously promote both the creation of an environment in which stores can willingly accept cashless payments and the encouragement of the use of cashless payments by consumers where payments can be made cashless.

Meetings of the Study Group on the Future Direction of Cashless Payment, which have been held since September 2022, confirmed the current situation surrounding the cashless society in Japan by conducting fact-finding surveys on consumers, and discussed the societal significance of introducing this payment method, the future direction of a cashless society in view of current trends and anticipated changes in technology and the business environment, and new indicators that should be targeted.

2. Outline of the Report

32.5% of payments in 2021 were cashless, but according to a fact-finding survey, 54% of respondents said they use cashless payments for at least 70% of transactions in their daily lives, showing that cashless payments have spread widely among consumers.

The social significance of promoting cashless payments is high in that it will create a new future that incorporates data linking, digitalization, diverse consumption styles by revolutionizing payments, which are closely related to people’s and businesses' activities and resolve existing issues (e.g., reducing infrastructure costs related to cash payments, improving operational efficiency, and addressing labor shortages).

A cashless society is a digital society where more payments can be made effortlessly and data can be seamlessly linked, and the discussions were summarized from the perspectives of three stakeholders: individuals, operators, and the government.

Actions that are necessary to achieve the ideal situation include spreading information to consumers and participating stores, creating a competitive environment, developing services with value added, automating and optimizing transactions, enhancing authentication methods, and promoting DX in businesses and the government in order to fulfill the sequential goals of (1) increasing the ratio of cashless payments to 40% by 2025 and (2) ultimately making all transactions digital. It is important that the government and each implementing body work together to steadily implement these measures.

We hope that the details of the report will be widely shared among stakeholders, including those in industry, to broaden the understanding of the current situation surrounding the cashless society in Japan, and that cashless payments will become more widespread as awareness deepens regarding the significance of a cashless society, future direction of cashless payments—including current trends and anticipated changes in technologies and the business environment—and new indicators that should be targeted.

Related materials

• Report compiled by the Study Group on the Future Direction of Cashless Payment (in Japanese)(PDF:7,418KB)
• Report compiled by the Study Group on the Future Direction of Cashless Payment (Outline) (in Japanese)(PDF:4,103KB)
• Supplement: Analytical Results of the Consumer Fact-finding Survey (in Japanese)(PDF:1,972KB)

Divisions in Charge

Cashless Payment Promotion Office, Commerce and Service Industry Policy Group