The experts may be right that e-commerce and online shopping represent the unstoppable wave of the future. But with all the media attention being lavished on cybermarketing, perhaps not enough attention is being paid to other new ways in which determined merchants are trying to get reluctant consumers to loosen the grip on their purse strings. Especially notable among methods of getting us to part with our money — quickly — is the new debit-card system just introduced nationwide at some 100,000 stores, hotels, restaurants and other businesses, and even at some hospitals.
Some have questioned the advantage of the widely heralded J-Debit card payment system when credit cards are already in such widespread use. The benefits most heavily promoted by the 617 financial institutions taking part in the system seem real enough.
One is that there is no need for the customer to sign a sales slip. Purchases are paid for simply by passing the debit card through a terminal and entering one’s personal identification number. Another is that there are no fees involved on the customer’s side. Of course, this means that — unlike with credit cards — shoppers cannot make extravagant purchases now and pay later. In what may be another distinct advantage for careless consumers, the new cards are effective only for the amount currently in one’s bank account.
That is not the case with credit cards, of course. Despite their proliferation and seeming ubiquity in today’s Japan, however, the use of plastic credit here lags well behind its acceptance in the United States and Europe. Indeed, industry experts note that Japan has only one-third as many credit-card holders as the U.S. Those who do use them have long recognized the apparent benefits of being able to shop, even for costly items, not only without carrying large amounts of cash but also without paying until the following month or even later.
Here, as elsewhere, many who are inexpert at handling their financial affairs have learned to their grief that the day of reckoning can come all too soon. Simply having a credit card, which is an easy accomplishment for anyone currently employed, is very different from being able to pay for expensive budget-breaking purchases. The penalties in additional costs and impaired credit rating can be severe. Horror stories in the popular media about young people hopelessly mired in debt, together with the traditional preference of many in this country for strictly cash dealings, have contributed to the slower acceptance of credit cards here.
The explosion in the popularity of e-tailing, or sales by means of the Internet, especially but not exclusively among young Japanese, may help to change that, in the same way that it could encourage rapid enrollment in the debit-card scheme. Shop owners and restaurant proprietors, indeed much of the nation’s beleaguered retail industry, clearly hope so. As one industry spokesman has already noted, the new system could become a core settlement method for online shopping for the many people who do not have, cannot obtain — or do not want — a credit card.
Although some banks and retailing giants are holding back from the full-scale J-Debit program, reportedly for security reasons, others seem agreed that such concerns are being exaggerated. After all, they note, the service has been in effect on a low-key but apparently successful trial basis for a little more than a year, although the experiment involved the participation of only some 10,000 shops. With 10 times that number now aboard, the Debit Card Promotion Association is optimistically predicting another 10-fold increase, to 1 million stores and other retail businesses, in only five years, envisioning a total exceeding the estimated 700,000 or so outlets that accept credit cards.
That projection may not be unrealistic, since the retail industry, locked in a struggle for survival with close-fisted consumers, finds much to like in the new system. The service fee retailers pay is lower than the one for credit-cards and, of special importance under today’s economic conditions, they are reimbursed within a day or two, not the month or longer required for credit card purchases. If the arrival of a cashless society in Japan is imminent, retail establishments participating in the debit-card service may not feel called on to promote personal financial responsibility. Will the banks? The new cards may not allow consumers to fall hopelessly into serious debt, but they make it very easy to spend everything one has in the bank.
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