A Journey to Cashless Tokyo

The reality is far behind the digital utopia

Photo by Blake Wisz on Unsplash

Walking around business districts in Tokyo, you notice immediately distinctive, old-fashioned, and ill-equipped society as well as new bold initiative to disrupt the papers and metals by segregating laggards. With three consecutive days from Thursday to Saturday, the mounting evidence shows that the City of Tokyo needs something further to be done by the government, mega banks, and young people for the next generation of digital transactions. The bottleneck is apparent among those who left far behind the non-cash transaction. The digital economy will emerge in the rich counties including Japan. But digital payments will take off very slowly, including plastics and smartphones.

On Thursday afternoon, it was a clear sky but a little bit humid in Tokyo. Financial institutions extended the operation hours of ATM, automatic teller machine, so that city residents can get money cashed out instantly after tedious work, at least in theory. They can’t resist a desire to rush into the most popular shopping mall in Ginza. This scenario does not always work because there is a long winding line created by a crowd of slow senior people, especially retired ones on 15th of every other month to get their pension out of the machine. It is somewhat embarrassing to see old people fiddle with new ATM operations. They often get stuck on machines and call human tellers for assistance. If they need assistance, why don’t they go to human tellers at vacant over-the-counter in the first place? For old customers, tellers are kind of intimate friends to talk about a daily event. “How are you doing?” As soon as the conversation takes place, branch manager approaches noisy clients to interrupt them and save human tellers to ignore the unwanted interaction. It is not physically harmful but a burden for young cosmopolitans to do banking business. In the young bank customers with high-tech devices, it is a cloudy sky and the humidity gets worse inside the banks.

Friday, when you walk out of the office in Nihonbashi to grab lunch, you accidentally bump into the street of Bank of Japan, the central bank. What you witness is a crowd of people coming out of the fancy building of solid expensive stone. They pull out the smartphone to check the private emails and subsequently play some games. A play goes on until 1:00 pm sharp when the official operating hours resume for the very long slack afternoon. The work was almost over at 3:00 pm before the weekend.

Following Saturday, it is fresh air. At two publicly funded universities in Tokyo, you witness the entirely cashless operation of grocery store in Kasumi, Tsukuba Store. It is located at 50km northeast of Tokyo and is somewhat ahead of another stingy experiment of cashless payment at Japanese restaurant of University of Tokyo, Kashiwa Campus. At Kashiwa, people can eat a fresh raw tuna on the top of rice bowl under $10 for lunch hours at Department of Marine Studies but no cash is accepted.

Two extreme indulgence and one bold experiment are followed by the incident on Saturday lunch time in a grocery store. When I was reading a story of “cashless future” covered by the liberal newspaper of the Economist on the wide-open eating area, two old people dropped a bunch of Japanese coins to spread under the table I was sitting. It was easy for me to identify the type of metals and those are just Yen 1s, less than the pennies. Two stern-looking metal owners, each man and woman, scrambled with the high gear into my small temporary private space and started to search lost coins in all directions without my prior consent. They should have said to me, “Excuse me but may I interrupt you for a moment and collect our coins under the table?” It was very rude but those people at age of over 70’s might have worked hard to serve the inefficient cash economy in Japan.

Five minutes are gone forever. My thinking is gone, too. What is left is the relieved word from old people, “Arigato”, meaning “Thank you”. I grinned with pleasure. But the expression of their gratitude doesn’t promote the efficient future of cashless transaction and the ill-equipped behavior doesn’t get fixed without any penalty on the side of two old people. Worse, those people don’t mind it and push the cashless society backward. It is an extra hidden cost.

Advanced countries are eliminating cash, a British paper notes. In Sweden and Norway, the cashless digital transaction is becoming dominant. Britain and America are catching up with the Nordic countries while China sets the remarkable statistics to reach 34% non-cash payments in 2017. Those countries cut a high cost of fixed and running infrastructure — ATMs, vans to carry notes, and human tellers at the counter. The cashless efforts will reduce the cost of inefficiency, which marks about 0.5% of GDP.

The new digital economy is inevitable. Despite some side-effects such as technical vulnerability, legal enforcement, and readiness of merchants, the promoter of the new future should make a clear and decisive action toward digital transfers. The paper-pusher of the Bank of Japan is requested to use exclusively non-cash payment with their smartphones rather than playing Pokemon during lunch break. Certain portion of pension should be paid in digital currencies, say, 5% in the future. The village of elderly folk such as Sugamo, Tokyo, opens digital stores of Amazon near the JR train station.

The new utopia will come to us one day in Tokyo. Among the expected benefits, we can sketch the world of less cash transaction, shorter lines at ATM, less human tellers for efficient society. No worries, but the older folk will drop a bunch of plastics instead. To say to those people gladly, “We met each other again. There is something in common. Whether it is cash or cashless, tiny pension will not make any difference. After all, we are sort of endangered species.” Your Medium writer is not necessarily young observer of the economy, but the mind is still young enough to identify the bottlenecks.

Taught marketing @ universities in Tokyo for a decade, ex-I-banker & mgmt consultant @ Kurt Salm (Accenture Technologies now), Georgia Tech educated