How Japan is moving towards a cashless society with digital salary payments

Sep 21, 2022 | News On Japan

Sep 21, 2022 (weforum.org) - The Japanese government is preparing to introduce a system for companies to pay salaries digitally – without going through bank accounts – by spring 2023.

By promoting this system, which allows companies to transfer salaries to workers using smartphone payment apps, the government hopes to solve the complex issues facing foreign workers in Japan, expand the financial services market and deregulation, and promote growth.

However, according to a survey of 247 companies conducted by Works Human Intelligence, a leading developer of integrated HR systems for corporate clients, less than 30% of companies are considering or will consider implementing digital salary payment. The survey found that system and operational costs and increased operational person-hours were the main barriers.

The potential benefits of paying salaries digitally are significant. It reduces administrative fees associated with payroll payments and helps foreign workers, who often find it difficult to open a bank account. Companies can also indirectly offer benefits such as cashback and point rewards for using QR code payments and e-money payments as part of their employee benefits program. On the other hand, the survey highlighted that most companies are not yet ready to adopt such a system.

In 2018, the Ministry of Economy, Trade and Industry (METI) formulated the "Cashless Vision," which proposed measures for Japan to move towards becoming a cashless society. It aims to increase cashless transactions to 40% by 2025, when the Osaka Expo is held, and possibly 80% in the future. The goal is also to help solve issues such as labour shortages, regional revitalization, and productivity improvement. ...continue reading

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