Bangkok Post – Local govts in Japan supporting elderly by promoting cashless payment systems

FUKUOKA: In a country notorious for its reliance on cash, municipalities across Japan have been staging electronic payment uptake drives to stimulate digitalised consumption by granting shopping points for transactions using QR codes.

The campaigns, run mostly as one-off events in collaboration with local businesses and shop owners, have become increasingly popular, carried out on numerous occasions by many of the municipalities involved. But not everyone is happy.

Some remain reluctant, especially elderly people and others who find digital devices difficult to operate, and who continue to view cash as the be-all and end-all for making purchases.

Japan’s abnormally large elderly demographic appears to be a key reason for the country’s lack of enthusiasm about adopting electronic payment systems, which accelerated dramatically during the coronavirus pandemic.

In carrying out the QR code initiatives, local governments are striving to eliminate perceived inequities among various demographics by providing people who prefer them paper gift certificates, while conducting smartphone workshops targeting seniors.

Tagawa in Fukuoka prefecture is a case in point. The government of the southwestern Japan city, which has a population of 45,000, implemented its QR code-based consumption stimulation programme for the fourth time in January.

Once a thriving coal mining city, Tagawa is currently among the municipalities experiencing the most significant aging of its population in the prefecture. City officials there are nonetheless pushing ahead with its cashless payment drive, including the QR code programme.

“Citizens say they would like to see this run every month,” said Mitsugu Setoguchi, 46, a section chief at the city’s industrial promotion division dealing with commerce and enterprise.

Local governments usually implement programmes to encourage consumer spending in cooperation with major QR code payment system operators, using funding resources such as special local grants for regional revitalisation from the central government.

The QR code was invented in 1994 by Denso Wave Inc, a Japanese industrial equipment manufacturer in the corporate group led by major automotive parts maker Denso Corp, to keep track of its company’s inventory.

Nowadays, QR codes have much broader commercial applications and are often used as a contactless payment method, allowing consumers to scan codes to purchase items or services from mobile apps.

Tagawa conducted its QR code programme for the first time in October 2020 and now has tie-ups with digital payment systems PayPay, au Pay and d-pay. The city said that following the introduction of its first programme, which offered a 20% discount on products when using the payment system, the number of QR code users in its jurisdiction increased by 30% for the period.

But individuals unfamiliar with digital devices, as well as many elderly people who do not own smartphones, do not believe they stand to benefit from such a campaign. As of Oct 1, 2023, elderly people aged 65 and older accounted for 34% of Tagawa’s population, higher than the prefecture’s 31% average.

Before the introduction of the programme, the municipal government received several complaints from people who said that they could not see how the campaign benefitted them, as they did not own smartphones.

But Tagawa has continued to run similar campaigns, even since the pandemic subsided. And the number of local governments that have followed suit has been growing steadily.

PayPay Corp, which began the initiative in July 2020 and plays a central role in providing the service, said that as of Feb 15, 457 municipalities had either implemented QR code uptake programmes or were scheduled to do so.

Of those, Sakata in Yamagata prefecture and Nagahama in Shiga prefecture were among 281 that had conducted such programmes twice or more, while Hanamaki in Iwate prefecture had implemented it as many as 10 times.

A PayPay official said the programmes can be mutually beneficial for local governments and consumers alike, leading the electronic payment campaigns to be implemented across multiple domains.

“It makes it unnecessary for local governments to issue and print shopping vouchers for refunds, and consumers need not leave their homes to purchase vouchers,” the official said.

For local governments, getting people who put their faith in cash to change over to cashless payments is urgent business. Part of the “digital poor,” seniors are often left out of enjoying the convenience and benefits of digital access compared to younger people.

In a survey of some 1,600 respondents conducted by the Cabinet Office in July and August 2023, roughly half of those aged 70 and older said that they either “hardly use” digital devices such as smartphones or “never use them.”

Under such circumstances, the Tagawa municipal government has decided to continue issuing the paper-based shopping vouchers that were first offered in 2009. “Trust in paper remains strong,” one official said.

To encourage elderly people to take part in the uptake programmes, the city holds seminars teaching them how to operate smartphones. Similarly, the Hanamaki city office provides assistance to people at mobile shops, while many other local governments have set up consultation services within their buildings.

Setoguchi, the Tagawa city official, suggested teaching people how to use smartphones is the quickest way of getting them to go cashless.

“First and foremost, we hope to use this opportunity of having people learn about cashless payments to familiarise them with how to operate smartphones,” he said.