In this thread on Travelling to Japan
seodoa writes:
It’s of my understanding that Japan is a heavily cash based society, even to the extent of buying apartments in cash. Is it really like that? What’s the reason for this?
Edit: Also, how does this work for e-commerce?
Yeah, it’s very cash-based. Some major transactions do go down in cash, like you say, but most are simply done by bank transfer. And every now and again you hear of police turning up a shopping bag filled with cash, or of someone’s life savings in shoeboxes full of cash going up in flames.
And most people have at least one credit card, and they will use it for on-line transactions and the like, business lunches maybe, but not usually for paying bills or dinners out.
Why did it turn out like that? Who knows, but my guess is that some vendors are reluctant to accept the hassle of it all, others were afraid of fraud issues (Japan’s legal system is not geared to deal with setting things like that right). Also, they never used personal cheques in Japan (I don’t think) so they never had that notion of non-cash payment in the first place. Just my WAG, and someone might have a better idea.
There are no personal checks in Japan?
So its either you walk outside with a big bundle of money to pay a few hundred dollars worth of bills or nothing?
Jeez… Must be pretty rough with pickpockets around.
Yeah, I routinely walk around with about US1000 in my wallet. Mugging is not such a big thing, and I don’t look so muggable. 
Credit cards, and checks, are very little used here in the Netherlands, too. Most payments here are made through ATM. Most stores have ATM machines, and your payment gets deducted from your credit immediately. That also means that if you don’t have a positive net bank saldo, your payment will bounce there and then.
As a result, there is not much market for credit card companies. Nobody has a “credit rating”. When I first heard about credit card debt and “having a good credit rating” here on SDMB I had to look up what was meant.
Ever since on-line ordering became big, many people got an credit card, mainly for payments abroad. On-line payments withing the Netherlands are done with a newly invented kind of ATM-on-line.
As has been already noted, pickpockets are not a big problem here. It just doesn’t really happen like it does in the states.
Most people pay bills through an ATM transfer, no cash involved. Or you can set most bills to automatically deduct from your bank account, which is even more convenient. If you are the type to worry about pickpockets, ATMs are fairly plentiful. My bank allows me to use any of their ATMs or 7-11’s ATMs free of charge, and, in my area, there is a 7-11 on just about every block [/hyperbole] so it’s not a problem for me at all to get money, except for late at night when the ATMs close. But I get around that by planning ahead and always having a spare Benjamin (or, in this case, a spare Fukuzawa) in case of an emergency. It’s not difficult at all once you get used to it.
FWIW: At the moment I have the equivalent of over 380 USD in my wallet and I think nothing of it. That’s pretty normal for me.
We pay a company to pay our bills for us from our checking account, because otherwise we would have to bring cash for each bill to the appropriate place of payment. When we got this (rented) apartment, we had to bring almost $6K in cash with us. It’s insane, and the fact that Visa is decidedly not here was a major culture shock when we moved to Okinawa.
No Visa in Okinawa? The few places that do take JCB or Mastercard have no problem with Visa here in Niigata, and we’re pretty darn rural. Lawson convenience stores even take AmEx and Diner’s Club.
Also: You pay a company to pay your bills? My bank does that service for free… Of course, by “checking account” I guess your bank account is in the US, which would complicate things, I suppose.
Not just in Japan, but in the Gulf and many parts of Europe are used to cash. When I bought my apartment the reservation fee (about $5K) was paid in cash. My rent in Dubai was also paid in cash (and there one usually pays in a lump sum for the whole year… sometimes in cash, sometime by cheque).
I have about $1500 on me at the moment in a few different currencies and it doesn’t feel odd at all.
As I wrote in the other tread, this is changing, and credit card usage is quite common in Tokyo. We can use at most restaurants, all department stores, grocery stores, the barber, etc.
Smaller restaurants won’t take them for lunches, and sometimes not at all, but that’s the minority.
It used to be all cash, all the time. I used to carry the equivalent of several hundred dollars around with me all the time, but I carry less now. I was paid in cash, once a month, for my first job. And stupidly left my bag on the train. Fortunately I realized it right away, contact the station attendant and they were able to retrieve it.
On-line bank transfers have made life much easier.
I may be wrong about this, but I don’t believe revolving credit is allowed in Japan the way it is in America.
When you make a purchase by credit card, the merchant asks how many payments you want it split into (generally they only do this for larger purchases), AFAIK, you can choose one payment or two (you might be able to do more, I never have) and then the payment you have to make at the end of the month is based on that amount.
The credit card then works more like a charge card where you have to pay the whole thing (or pretty close to it) on the next due date, rather than just being required to make a minimum payment.
The number of places accepting cards has been steadily increasing. Many convenience stores accept them now, for example. One big change I’ve watched happen is the train lines adapting to them. Back in '95, none of the stations took them. By 2000, Some of the major stations did, but you had to go a clerk at their travel agency desk (not the regular ticket window) and could only use them to buy bullet train tickets (this got me in a pinch a few times when I’d use a card to go to the middle of nowhere for an assignment, then discover I could only use cash to get back). Now, not only is just about every station equipped for credit cards at the main ticket window, the automatic machines for express trains take them as well, so no more waiting in line at the ticket window behind the deaf old granny with 50 coupons trying to arrange a twenty-stage itinerary for her cat.
Taxis have also started taking them now, which is really convenient late at night.
I think it is important to make it known for anybody who might not be familiar with the country that Japan DNE Tokyo and Tokyo DNE Japan. While credit card usage is becoming really common in Tokyo and a few other urban centers, it has yet to catch on everywhere else.
Just for the sake of example: In the city where I live, I can use credit cards at Lawson convenience stores (7-11, however, famously does not accept credit cards for purchases, although their ATMs are able to handle them for cash advances) and, if I go into the station ticket office, I can purchase train tickets with credit. The vending machines, however, only accepts cash, as do most businesses in town, save for the supermarkets and department stores. Also, of the 13 train stations in town, only the largest in the center of town takes credit, the others only have the facilities to take cash.
Large chains tend to accept credit, but in many areas, like my own, those large chains are very few in number. If I eat at Gusto, a nationwide family restaurant chain specializing in mediocre meals and so-so service, I can pay with credit. However, if I eat at Issaku, a large, locally-owned and operated izakaya (think like a bar & grill) that is otherwise incredibly modern, down to a computerized ordering system, I can pay only with cash. The same goes for almost any other restaurant or bar in town. If I asked to use credit for a taxi, I’d probably be laughed out of the cab. 
In the future this may change, but, for the time being and for better or for worse, credit cards have not yet caught on all over in the same way they have in Tokyo.
Perhaps a good rule of thumb in Japan is, generally, if you can reasonably expect to pay more than 10,000 yen at a place by yourself, it becomes much more likely that they will accept credit. Home centers, department stores, brand stores, some higher end hair salons, etc often accept them, but smaller boutiques, restaurants, bars, etc often do not.
Also, even when I go to Tokyo, I still like to carry cash even though credit cards are more readily usable there. Why do I? Because for every business I go to, even in Tokyo, that accepts credit, I end up walking into another that still doesn’t. Rather than worrying about who will accept credit and who won’t, it is simply easier (for me, at least) to carry cash.
And, Sublight, I have had a couple friends get themselves in semi-serious credit problems because of revolving credit, so I can only assume it is allowed here. But I may be wrong, myself.
I think it is also worth pointing out that, for many people, card loans seem more popular than credit cards as a source of credit for purchases. I’ve never used one, so I cannot go into the particulars, but basically, with a card loan, a bank extends you a line of credit and gives you a card that is similar to an ATM card. You can use this card to withdraw cash on credit from an ATM, rather than from a bank account, and use that cash to make purchases, much like a cash advance on a credit card.
When I studied in Tokyo, I used my credit card fairly often to make purchases and it was certainly convenient. But having moved out of the Tokyo region, I’ve become a lot more accustomed to carrying cash and I haven’t used my credit card since. But, like any country, Japan is not one small entity and each region is different. So OMMV depending on where in Japan one might live or visit.
Well, the few places that take MC will take visa, but it’s very rare. I’m not sure about lawsons. And yes, it’s an American checking account–not worth the trouble to get involved in the Japanese baking system for the few years we’ll be here.
Personally, I can’t wait to get involved in the Japanese baking system.
As soon as I get my new oven.
Would someone please elaborate on this? How can a legal system not handle fraud? What mechanism is used to prevent and/or punish fraud?
It’s true in China, also. Everything is pretty much done with cash.
I asked an intelligent Chinese friend there about credit cards. He said the credit card companies tried breaking into China, but people began to see their debt increasing once interest payments hit and they backed off them. Chinese people tend to be good savers and most don’t earn enough money to waste cash on interest.
It was just his view of it, so take it for what it is worth. Oh, and he actually had a credit card himself, which he paid off monthly(in cash). He figured he might need it for an emergency, if he didn’t have enough cash on hand.
They don’t use personal checks, either. I tried explaining to this concept to many Chinese people, and all of them seemed to think it would be too easy for someone to forge checks and empty out your bank account.
Anyway, it’s just cultural really. Some things just don’t catch on in certain cultures.
Hey, we don’t use chopsticks even though it is painfully obvious to most Chinese people how dignified and practica they are.
I think the reference was in regards to civil law suits. Criminal law is pretty straight forward (if you’re charged, you’re pretty certain to be convicted). I can’t remember ever even hearing of a civil law suit, though. I know of one embezzler who was shamed (well, blackmailed, really) into repaying most of what he’d stolen, but there was never any question of a civil suit to reclaim the money.
My understanding matches Sublight’s (although he may have been the culprit who explained it to me in the first place – I don’t remember): revolving credit cards are not allowed. There are lots of small loan shops, though, and I imagine they offer some sort of credit line that would qualify as revolving credit by most definitions.
Our acceptance of credit cards is why we don’t save like other countries do. It just does not feel like money . If you actually had to take a few hundred out every time you wasted it, you might learn that it is real money. Casinos just use those tokens, not real money.
I used to teach English (mostly to adults) in Yamaguchi prefecture, and a former student once contacted the school to ask if one of their foreign teachers (i.e., me) could take a look at a document they’d received from a foreign client. They’d sent this client a bill, and had gotten back what looked to them like a formal demand for money. She faxed the document over to the school. Since it was black and white, had been enlarged, and a bunch of personal information had been blacked out, it took me a moment to realize that I was looking at a CHECK.
I explained this to a fluent-in-English Japanese coworker so she could in turn explain it to the former student, but even my coworker was rather confused by the whole checking thing. She said “But what are they supposed to do with this to get the money?” I recommended taking it to the bank and asking them to sort it out. I never heard back about this, so I hope the bank did manage to handle cashing the check.
When I lived in Japan I had all my regular bills like rent and utilities direct debited from my bank account. I was told that there was also a service available at convenience stores where you could bring in your bills and pay cash there, but I never did this. The only other big expense I remember was booking a vacation through a travel agent. I just went to the ATM, withdrew the necessary cash, and brought it to their office.
I regularly carried the equivalent of US $200-300 in my wallet, something I would never do in the US. But there’s very little street crime in Japan, especially in smaller towns like the one I lived in.
Revolving credit cards most certainly are allowed- I had a citibank/group revolving credit balance when I lived in the inaka. Used it to buy computers and things online, cheaper than paying the crippling in-store prices! (Is 8 man volt a national chain?)
pdts