Japanese consumers’ adoption of cashless payments is gathering pace. How might society as a whole be affected? Funabashi Haruo calls for introspection.
Japan is moving toward a cashless society. Whether riding a train, eating out or shopping, a card or smartphone is all we need. Not carrying cash around does not inconvenience our daily lives, and it would appear that the government is trying to further encourage this trend.
In the past, salaries were paid in cash. In many companies on payday the company president himself used to hand all his employees their pay packets containing wads of bills. Employees felt a real sense of gratitude. Then each employee would go home and perform the same ritual for his wife. That was in the days when many married women were full-time housewives, and they too felt a sense of gratitude. When salaries came to be paid by bank transfer, the authority of the company president and the authority of the head of the household declined.
As the use of credit cards became more widespread and people stopped carrying cash, its function as a means of regulating spending declined. Since cash is physical money, people are naturally forced to tighten their belts when it gets closer to payday and they have less cash in their wallets. This function of cash disappeared, and consumer credit flourished.
On another topic, when I used to work for the tax office, the industries that were most prone to tax evasion were pachinko parlors, “love hotels,” and sex establishments. Takings at these businesses are almost exclusively in cash, and it is difficult to ascertain stock levels. Since users of these services do not require receipts for payment, it is next to impossible to obtain evidence of actual use. Moreover, the operators of these establishments lack the mindset that would dispose them toward paying taxes. As far as the tax office is concerned, they are a troublesome nuisance.
A similar type of industry in this respect, though I am somewhat reluctant to cite it as an example, is that of religious corporations. In this industry too, income is in cash, stock is almost zero, and expenditure is unclear. Moreover, since income derived from religious activities is tax-exempt in Japan, designating a greater share of business as religious activity makes the activities of religious corporations almost wholly tax-exempt.
As the cashless society gathers pace, how will such industries be dealt with, and what will happen to those working in such industries?
It would appear that questions such as these are already arising. For example, it seems that some temples and shrines have QR codes printed on their offertory boxes and accept payment by smartphone. Some are also utilizing crowdfunding, which has recently started to gain ground in all fields. Covering the expenses of restoring Buddhist statues is one example of how this method has been used. In a case such as this, money donated is used for the stated purpose, so compared to a donation that simply vanishes without trace it is far more transparent and the donor benefits from the feel-good factor.
Another manifestation of the cashless society is the recent popularity of virtual currency. While it is unlikely that virtual currency would be used in the industries for which classic examples were cited above, nevertheless there are concerns about its use as a means of tax evasion or money laundering, and its impact on taxation and financial administration has been discussed at international conferences such as G20.
Changes in society as a result of the development of various technologies and products in the quest for convenience have been experienced by mankind for thousands of years. At the same time, change means discarding something and adapting ourselves. So too will this latest move toward a cashless society require us to engage in rigorous analysis and harness our powers of imagination in respect of what will be discarded and how we ourselves will change as a result. Failure to do so will see us swept along aimlessly by the current of the times only to come to regret it, when it is too late.
FUNABASHI Haruo is a historian and CEO of the Sirius Institute Inc.