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Cash payments have declined steadily in Japan, which increases convenience for consumers and can also contribute to environmental goals, Payments Japan has said.

In April 2018, Japan’s Ministry of Economy, Trade and Industry announced the government’s Cashless Vision.

This aimed to reach a 40 percent cashless society by 2025. At that point, less than one-quarter of the payments were made without cash.

Japan is now approaching that goal with 36 of all payments having been made cashless in 2022, Payments Japan, the association tasked with promoting cashless payments in the country, in its 2023 annual roadmap.

Although Japan “is making steady progress towards its goal”, the association noted it is still “low” in international comparison.

Payments Japan says more than 95 percent of payments are cashless in South Korea, while cashless payments make up 84 percent of total transactions in China and 73 percent in Australia.

Considering these numbers, the association argues it is “necessary to continue promoting cashless payments even after reaching a cashless payment ratio of 40 percent”.

Such a continuous shift would be welcome not only to align with international trends but also because of Japan’s wider commitment to addressing environmental issues, the document added.

Cashless payments and sustainability

In the , Payments Japan also looked at the impact of cashless payments on environmental and sustainability factors.

In 2015, the United Nations released the 2030 Agenda for Sustainable Development, which set international development goals by 2030.

Payments Japan claims that cashless payments can contribute to the achievement of sustainable development goals.

Initial research by the body found that carbon dioxide emissions related to a 1,000 yen payment in case of a cash payment is 1.06g, while it is only 0.34g if the payment is made digitally.

“Based on this trial calculation, we could confirm that cashless payment has a lower environmental impact on daily payments”, which means “using a cashless payment is a more environmentally friendly action”.

The association acknowledged, however, that these figures are based on a trial calculation that did not have sufficient data and could “not necessarily [be] an accurate value”.

The body also measured the impact of cashless payments against the 17 goals set by the UN and concluded that although these goals “seemingly have nothing to do” with cashless payments, in some cases, cashless payments can either directly or indirectly contribute to the sustainability goals.

For instance, non-cash or digital payments can move forward Goal 8, related to “decent work and economic growth”, by allowing foreign workers to make remittances faster, cheaper and easier.

The document noted that the number of foreign workers is increasing in Japan.

Many, however, are reluctant to send money to their families regularly as they typically have to go to a branch that might be open only on weekdays or during the daytime.

The body argued that “it is hard to say that this working environment is friendly to foreign workers”, pointing out that “it can be even more important in the future to develop an environment in which money can be sent easily and cheaply anytime, anywhere”.

Following extensive discussions with stakeholders, the association concluded that “at first glance, cashless payments seem to be used to solve social and environmental problems that seem unrelated”.