Business

Japan credit card firms may apply discounts to monthly payments to ease impact of tax hike

JIJI

Major credit card companies are considering deducting points earned during purchases from the balance requiring payment, under a government rebate program intended to cushion the impact of the consumption tax hike planned for October, it was learned Tuesday.

Observers have suggested such a move would be more understandable and satisfying for users than giving them shopping points to use at a later date in order to lessen the burden of the tax rate hike to 10 percent from 8 percent.

The firms considering the measure are JCB Co., Sumitomo Mitsui Card Co., Credit Saison Co., UC Card Co. and Aeon Financial Service Co.

Users of credit cards provided by the firms will have 5 percent deducted from payments for goods bought at small retailers. The rate will be 2 percent for purchases at franchises of major convenience store operators and other large retail companies.

If a person buys items worth ¥10,000 at a small local shop using a credit card provided by the companies in October or later, they will have to pay ¥11,000 with the tax included. When charging the user, the credit card firm will deduct ¥550, or 5 percent of the total payment, and only ¥10,450 will be withdrawn from the person’s bank account.

Mitsubishi UFJ Nicos Co. also plans to introduce such a discount for its MUFG Card, one of its three credit card brands. For the other two brands, DC Card and Nicos Card, applying such a measure would be difficult due to system-related issues, so shopping points will be given to users after the payment is settled, according to Mitsubishi UFJ Nicos employees.

Moves to reward customers who use cashless payment systems are becoming more widespread. Ministop Co. and three other major convenience store operators are set to offer discounts when customers pay for their purchases using cashless systems.

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