Cashless-Bound: Japan's Transport, E-Commerce Partnership on the Fast Track

In a country with strong cultural affinity toward bills and coins, the latest move could bring about a huge change to the daily routine of Japanese commuters and possibly contribute to the country's push towards the use of cashless payment systems.

The latest data from Japan's Ministry of Economy, Trade and Industry shows only 20% of the country's population make a payment through cashless methods - a behavior Tokyo has actively been trying to change.

Two years after that, the Japanese government also published an updated copy of its Abenomics policy, named after Prime Minister Shinzo Abe, which reiterates the country's goal of achieving a cashless payment rate of 40% by 2027.

The partnership between Rakuten and JR East could be an important catalyst in the adoption of an intangible payment system and break down the cultural apathy toward it.

Rakuten Payment CEO Koichi Nakamura told Cointelegraph Japan last week that it could not elaborate on the incorporation of cryptocurrencies as a payment option but conceded the company had reached a point where a final decision needed to be made.

"Korea has one of the world's most widely used cashless payment systems, with its cashless payment ratio exceeding 90%. This is because, as a national policy, credit card settlement was promoted under the guidance of the national government, including deductions of 20% of the amount of income used by credit cards and obliging stores to use credit cards."

Tokyo is making concerted efforts to encourage the development of new cashless payment services and their adoption by general consumers.

One of these steps is the provision of reward points of up to five percent on purchases made with cashless payments at small and medium-sized businesses.

The incentive will be in effect for nine months to encourage Japanese consumers to try out the various cashless payment options available.

The partnership between two household names in Japan could give a major boost to the government's continued efforts to encourage its aging population to try new payment methods.