It seems like everything is going cashless these days. Japan is no exception. And a new spike in COVID-19 cases is even impacting a long-term tradition of end-of-year gift-giving: otoshidama. But, according to some, the move to cashless in this case isn’t just about the pandemic.
The Rush to Cashless
Japan’s worldwide reputation as a technological forerunner is often belied by its unwillingness to let go of old customs. Fax machines are the most-cited example of a tech that’s long overdue for replacement. (The little buggers are still prevalent in many Japanese business and government agencies.) The country’s attachment to personal seals on documents is another (though that also appears to be changing rapidly).
Another such example is cash. Until recently, cash has been king in Japan. Less than 20% of transactions in the country are cashless. “Cashless” here includes either debit/credit card or mobile phone payment. (By contrast, 60% of all financial transactions in China are cashless. In South Korea, it’s a stunning 96.4%.)
However, that’s started changing in just the past year or so. As I’ve discussed, new QR code-based services like PayPay have led to a mini-explosion of cashless payments in Japan. The government is actively trying to accelerate this growth. It’s aiming for 40% of all payments going cashless by 2025. (The eventual goal is to push that figure closer to 80%.) Even Buddhist temples and Shinto shrines are getting in on the action by offering QR code-based donations.
When Pandemic Impacts Tradition
51% of people surveyed said they believed moving to cashless otoshidama was a good idea. Click To TweetWhile exact numbers are hard to come by, there’s been a sizable spike in cashless payments. As Daiwa Institute of Research notes, this isn’t shocking. With people in Japan restricting outside economic activity, more and more shopping has moved online – and thus, as a consequence, become cashless.
But the pandemic’s impact on payments is far from over. The government of Japan had hoped – nay, planned – that they’d have the country’s relatively light COVID-19 outbreak under control by now. Unfortunately, the opposite has happened. Japan now finds itself in the middle of a third wave, with record infection numbers set every day. Government officials are calling for residents to observe a “quiet” New Year at home. They’re also asking citizens to refrain from returning to their parental homes or making traditional New Years’ shrine visits.
As a result, reports Asahi DOT, many in Japan are also looking for an alternative to otoshidama. The year-end gift – usually from a relative or family friend to children in the family – traditionally takes the form of cash handed over in a specially designed envelope. But this year, many people are (rightly) wary about meeting family members and risking potential infection.
As a result, many are turning to cashless payments as an alternative to the traditional envelope of yen. Sometimes, this takes the form of an Amazon gift card. It can also take the form of a direct cash payment via a cashless app such as Paypay, or can be transferred on a cash-bearing transportation card such as Suica.
Overall, according to a survey conducted by the Japan Financial Academy, some 51% of respondents said they believed moving to cashless otoshidama was a good idea. Younger people are more likely to agree with that statement, with a full 70% of 20-year-olds saying they preferred cashless gifts.
“Win-Win Scenario”
But Asahi found that reducing COVID-19 risk wasn’t the only reason some people like cashless cash gifts. One 20-year-old woman, for example, lamented the hassle involved in picking out otoshidama envelopes and handing out the gifts personally. She described the move to cashless as “a win-win scenario.”
Of course, not everyone is on board. One 61 year old woman interviewed by Asahi described the pleasure of writing personalized notes along with toshidama gifts and lamented the encroachment of “Whatever-Pay” on this time-honored tradition.
As I’ve discussed before, however, even the elderly in Japan are becoming more accepting of cashless payments. Will otoshidama be yet another Japanese tradition – like hanko seals and temple donation boxes – that eventually goes the way of the fax machine?
