/

Mayor of London urges Japan Inc. to upgrade payments systems, draw on his city’s fintech sector

by

Staff Writer

The mayor of London on Thursday urged Japan to embrace more financial innovations such as mobile payments as it prepares for the 2020 Tokyo Olympics.

Speaking on a visit to Tokyo, Mayor of London Boris Johnson said London-based financial technology companies can help Japan Inc. bring itself up to date with new conveniences such as swipe-card payments and private taxi-hailing apps.

He said such innovations are unstoppable, however much established industries may resent the fact.

“We have to recognize that disruptive technology is simply inevitable and we cannot put the technological genie back in the bottle,” Johnson said. “Once the toothpaste is out of the tube, folks, that’s it.”

Speaking at the British Embassy in Tokyo, Johnson made a sales pitch for London’s burgeoning fintech sector, which centers on payments and lending and is driven by the use of mobile technology.

Fintech startups are throwing a small but significant challenge to the activities of banks.

Figures show London has become Europe’s fintech capital. As recently as 2014, the city accounted for 53 percent of total investment in fintech in Europe, management consultancy Accenture reported.

The forum heard that the 2012 London Olympics helped to make cashless payments routine as the city handled an influx of visitors from all over the world.

By contrast, Japan Post Bank Co., Japan’s largest bank, still operates ATMs that shut down overnight and during weekends, and payment network operator MasterCard Inc. says Japanese consumers use cash for 85 percent of transactions, compared with only 48 percent in Britain.

A representative of British bank Barclays PLC said by global standards corporate Japan is blind to the benefits of partnerships with innovative startups.

“It’s more risk-averse than the U.K.,” said Derek White, chief design and digital officer at Barclays. “There’s huge opportunity to just open that up. More than anything, (it’s about) opening minds to the fact that it can be done and doesn’t have to be done in closed systems anymore.”

Japan’s problem is partly one of its homogeneous culture, said Ikuo Hiraishi, CEO of SunBridge Global Ventures Inc. “The most important thing is how we can be globalized,” he said.

“People can start a global business anywhere, anytime. If we cannot go abroad … someone is going to come to this country to disrupt the existing (situation),” Hiraishi said.

  • http://www.an-chan.net/ Antoine B.

    Sounds a bit like a joke, as Japan has always been light-years ahead in terms of modern payment systems…
    recognize the ATMs are a pain in the a.. (but 7-11 saves you here), but I don’t get his point on card payments and taxis…

    Who needs a taxi-app in a city where you have taxis absolutely everywhere?
    You can pay by credit card (foreign as well as local) almost everywhere (including in taxis).
    Charge a Pasmo or Suica card and you have digital payment everywhere.

    So what is exactly your point, Mr. Mayor?

    • https://instagram.com/mikedo2007/ mikedo2007

      Uh South Korea has a lot of taxi too. But the Korean govt still release a Taxi-calling app, so I don’t know Japan are not learning anything from other advanced countries.

    • Kevin

      Are you sure? Look a little more deeply and you’ll notice the banking system and electronic payment systems are not as advanced as they are in other developed countries. EFTPOS systems are still not that common in Japan – cash is still king.

      • http://www.an-chan.net/ Antoine B.

        I agree : banking system in Japan is really bad and far behind the US or Europe.
        But when it comes to payment systems I haven’t seen anything better than Japan, with the super wide compatibility of suica (or others) contact less payments.
        Every time I go back to Europe, this really strikes me.

  • Kazuhiro Shino

    Bureaurats doesn’t want any real term globalisation which is tacit consensus in Japanese establishment this dogma has never discussed candidly in public even bureaucrats doesn’t want to be raising the issues as as the serious issue, another hindrance is ageing population who is awkward to change the life style & no incentive nor desire for changes

  • Peou Richard Kovit

    what a clueless twig.. the japanese were way ahead of that 10 years ago… e.g using their mobile phones to make payments for vending machines and etc… rofl

  • jimjimtk

    I find this article fascinating. Mobile payments have been available in Japan for more than a decade (Docomo started allowing mobile payments on their phones in 2004 using a Sony FeliCa chip – precursor to NFC). I use my phone (I can also use cards if I prefer) to make tap payments to get on the train and to make purchases in stores, shops, and restaurants.

    I can charge my phone to act like cash, which means that I can tap with the phone off, no need to enter a pin or use a fingerprint scanner, or even turn the display on – just pull the phone out of my pocket and tap. I use security only to charge a certain amount of money on the phone. It is beyond convenient.

    A dozen or so payment options and related android apps are available to support these payments on the same tap receivers at the registers.

    Taxi hailing apps also exist.

    So what is this guy talking about?

    Note: iPhones do not support any of this, because Apple does not support FeliCa chips and restricts the use of their NFC chips anyway. Just one more reason not to buy an iPhone.

  • jimjimtk

    The idea that people choose to use cash is separate from the technology available. Straight credit card systems (swipe) are available nearly everywhere in Tokyo. In addition, one can use a phone or cards like cash (tap) in stores, shops, restarants, taxis, trains, and buses. And it’s been here for awhile. I haven’t seen that anywhere else.