YOKOHAMA – Restaurants and shops in Yokohama Chinatown hope government relief measures for businesses introduced with the Oct. 1 consumption tax hike will help bring in new customers.
They are pinning their hopes on a rebate program for cashless purchases aimed at mitigating the impact of the tax hike to 10 percent from 8 percent and spreading the use of electronic payments in Japan.
The Yokohama Chinatown Development Association expects its tie-up with PayPay Corp., a smartphone payment provider run by SoftBank Group Corp., will attract consumers keen on taking advantage, including tourists who patronize the ethnic enclave and its roughly 500 restaurants and stores.
Under the state-funded program, 2 to 5 percent of purchases made via smartphones, credit cards and debit cards are refunded with shopping points.
“About 300 shops and restaurants have already introduced PayPay and China’s Alipay as part of efforts to follow the trend of cashless payments and welcome more inbound tourists,” said Nobumasa Takahashi, chairman of the association.
While cash continues to be the most popular payment method for Japanese, the association had been making efforts before the tax hike to get more people to adopt electronic payments.
Among Yokohama Chinatown’s recent endeavors, up to 20 percent of purchases were returned to PayPay clients in August during a temporary campaign that involved about 180 restaurants and shops.
According to the Ministry of Economy, Trade and Industry, the cashless payment rebates were being offered at an estimated 500,000 retail stores across the country as of Oct. 1.
In addition to higher price tags, another big concern businesses were facing was how much it would cost to prepare: The new levy was split into two tiers to help cushion the impact.
While the tax rate for restaurant food was raised to 10 percent, for example, it was kept at 8 percent for takeout orders, forcing restaurants nationwide to present two different prices for each item and update their cash registers to handle the difference.
Despite concerns that adapting to these changes could impose a significant financial burden on private businesses, restaurant and shop managers in Chinatown are taking advantage of new technologies and a government subsidy to get through the potentially costly transition.
Tamie Oda, who runs a shop selling steamed buns and souvenirs, replaced her cash registers with mobile point-of-sale terminals designed for use with Apple Inc.’s iPad a few months ago.
“The old register happened to be broken before the tax hike, so I introduced a so-called smart register,” said Oda, whose shop Ro Ishin is known for the panda face emblems on its buns.
The use of mobile POS terminals, which utilize tablet PCs and cloud computing services, are spreading as they are much cheaper than conventional machines.
METI provides subsidiaries to shop owners to cover up to 75 percent, or ¥200,000 ($1,800), of each new cash register bought to replace an old one to accommodate the new consumption tax regime. The government expects about 240,000 registers to be replaced by October.
Chinatown’s Takahashi said, however, that concern remains about whether all restaurants, including mom-and-pop outlets, can adjust to the two-tier system.
The association organized meetings for shopkeepers to study the tax hike in June and July with support of the local tax office, but only 30 or so participants attended each meeting — far below the area’s total.
“I would like all items taxed 10 percent to avoid confusion and trouble for retailers and customers,” Takahashi said.