Electronic payments using smartphones are becoming increasingly common at tourist spots, shopping streets and other locations around Hyogo Prefecture.
A declining population means a shrinking market for shops in the prefecture, and efforts are being stepped up to secure a revenue stream from foreign tourists, such as those from China and other countries that are trending toward cashless societies, by making it easier for them to make purchases electronically.
Easy to pay
“In China, we don’t carry much cash. It’s very convenient and helpful,” said a Chinese tourist with a smile at the Yoshitakaya souvenir shop at the Arima hot springs area in Kobe.
The 36-year old woman was paying for a purchase by WeChat Pay, a smartphone payment service offered by leading Chinese social media company Tencent. A shop clerk scanned the QR code on the woman’s smartphone with a special device, and the transaction was quickly completed.
A business association of shops, eateries and inns in the Arima area, aiming to appeal to Chinese tourists, implemented the payment system in July with subsidies from the prefectural government. Currently about 30 shops offer electronic payments, a number expected to increase to 80 this fiscal year.
Yoshitakaya, using a sticker at the entrance and other means, has been promoting its ability to handle smartphone payments, and the use of electronic payments by tourists from China and other countries has become a daily occurrence.
Yoshitakaya President Yoshinobu Yoshida expressed his satisfaction and expectations for the system, saying: “It’s easy to operate, and it places little burden on our staff. If word spreads that you can pay via smartphone at any shop in Arima, we’ll bring in more tourists from overseas.”
Prefectural govt support
This fiscal year, the Hyogo prefectural government established a program to subsidize one-third of the costs of introducing the WeChat Pay system and the Alipay system offered by Chinese e-commerce giant Alibaba Group.
The Yomiuri Shimbun
The Yomiuri Shimbun
The prefectural government especially wants to encourage the introduction of these systems along the “Hyogo Golden Route,” which connects the three cities of Kobe, Himeji and Toyooka, which boasts the Kinosaki spa.
In addition to Kobe’s Arima hot spring area, about 60 establishments in the Sannomiya Center-gai shopping street and surrounding area introduced a smartphone payment system in September using the subsidies. Currently about half of those in the shopping street can process smartphone payments.
The prefectural government held a training workshop for shop owners at Kinosaki, and has plans for another one in Himeji.
Elsewhere in the prefecture, the Minami-Awaji city government concluded an agreement with a company that leases tablet devices for WeChat Pay and other payment systems in June, and equipped 15 tourist facilities and Michi-no-Eki roadside rest areas with about 30 tablets.
Lagging behind Osaka, Kyoto
One major reason for shopping streets and other merchant associations speeding up the introduction of smartphone payments is the decline in population in the prefecture.
As of Jan. 1 this year, the prefecture’s population stood at about 5.5 million, down about 17,000 from a year ago to mark the eighth straight year-on-year decline.
“The shift of population from rural areas to Tokyo has produced an outward flow of young people,” said Hisashi Ietsugu, chairman of the Kobe Chamber of Commerce and Industry. “Consumption is also shrinking.”
This has also increased the number of bankruptcies of small businesses.
The prefecture is also facing a tough battle to lure inbound tourists. According to Mitsubishi UFJ Research and Consulting Co., spending by inbound tourists in the prefecture totaled ¥29.2 billion in 2017, down 8.5 percent from a year earlier and the second consecutive yearly decline.
This greatly lags behind Osaka Prefecture at ¥870.8 billion, up 33.3 percent from a year earlier, and Kyoto Prefecture at ¥233.1 billion, up 14.5 percent.
“As the use of electronic payment spreads, tourists will stay away from areas that don’t have the shops to handle such payments,” said Hideyuki Araki, a senior researcher at Resona Research Institute Co.
Memo
The spread of cashless payments through the use of electronic transactions is at a standstill in Japan. But cashless transactions have become the main method of payment in China and other countries. According to the Economy, Trade and Industry Ministry, in 2015, 89.1 percent of all payments in South Korea were cashless, and 60 percent in China. The corresponding figure for Japan was just 18.4 percent.
In China, it is estimated that Alipay and WeChat Pay command about 90 percent of the market share for cashless payment services.
One reason for the lack of proliferation in Japan is that counterfeit bills are rare, and thus trust in cash is high in the country. Another reason is that ATMs abound throughout the country, making cash easily accessible.Speech