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Cashless-Bound: Japan’s Transport, e-Commerce Partnership on the Fast Track

Partnership between Japan’s transport and e-commerce giant revs up Tokyo’s efforts to go cashless.

The Japanese transportation industry is leading the country’s long-standing efforts to go cashless. Earlier this month, two major players from the archipelago’s e-commerce and transport industries partnered up to simplify and promote payments that do not require hard cash.

Homegrown e-commerce giant Rakuten plans to incorporate its services into Japan’s premier railway firm, the East Japan Railway Company or JR East to provide electronic support for its “Suica” cards.

The cards are used to access trains as well as to pay for goods and services at certain kiosks in train stations and select stores around the country. If all goes as planned, users will be able to charge their transit cards using the Rakuten Pay mobile app by 2020.

There are some 5,000 train stations and approximately 50,000 buses in Japan, according to the government data. Currently, Rakuten Pay is used in more than 600,000 stores in Japan.

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.

Cash is king

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

Back in March 2017, METI launched the “Cashless Vision” campaign to encourage its citizens to go try digital payments.

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. Prime Minister Shinzo Abe

The main reason for this campaign comes down to the reluctance of the Japanese people to move away from using cash in their day-to-day transactions. Takeshi Tashiro, a visiting fellow at the Peterson Institute for International Economics, told Cointelegraph a number of socioeconomic factors have perpetuated the Japanese affinity of using cash.

“Japan’s cashless payment ratio is approximately 20%. Some of the reasons are high reliability of cash, low theft and high security; as well as easy access to cash. Deflation might contribute to this trend as that increases the value of cash.”

Another contributing factor is Japan’s aging population. Over the past 40 years, the number of Japanese people over the age of 65 has nearly quadrupled.

“For more than two decades, Japan has had a ‘graying population’ due to both long-life spans and low birth-rates,” a former United Nations official in Japan who asked to remain anonymous remarked in an interview with Cointelegraph. “Consequently, the elderly population tends to stick to the old habit of using cash; a habit learned from a time before cash cards, ATMs and credit credits were issued in the late 1980s.”

Population Makeup in Japan

The convergence of these factors, namely low crime, deflation, and an older population that are content to continue using cash have left the country lagging behind others that are quickly adopting a variety of digital payment options.

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.

Topping up Suica cards with crypto?

In March, a number of publications speculated Rakuten Pay would consider incorporating cryptocurrency support on its mobile app.

Given the newly announced partnership with JR East, this could mean that Japanese commuters might be able to use cryptocurrency to top up their Suica cards from next year.

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.

“At this very moment, there is nothing we can share with you as to crypto payments,” Nakamura replied to an inquiry from Cointelegraph Japan, right after the press conference in which its collaboration with JR East was announced.

“But now we are in a phase where we consider whether or not we can use cryptocurrency as a source of payments,” he continued.

The CEO highlighted two important considerations that would ultimately decide whether the company would include cryptocurrency support for the Rakuten Pay app:

“First and most importantly, the crypto related service has to be safe. It has to comply with proper regulatory frameworks. Second, it shouldn’t be difficult for users to use. We aim for familiarity, convenience and comfort. I don’t want that to be too difficult to handle from the beginning. You know there are still some people who think that smartphone payments are too difficult to use.”

Rakuten is widely considered as the Japanese equivalent of Amazon, and its partnership with JR East would likely affect almost all Japanese commuters and online shoppers. Based on data from Statista, Japan’s railways serviced more than 70% of the country’s total passenger transport volume in 2016.

The e-commerce giant’s position as a leader in its field gives it hefty clout in promoting the use of cryptocurrency as well. It is one of the latest companies to receive a license to operate a cryptocurrency exchange by Japan’s Financial Services Authority.

Late March, the company announced it would launch its exchange, dubbed Rakuten Wallet, this month with account applications having opened in April. Rakuten had acquired the service formerly known as Everybody’s Bitcoin in August last year for just over $2 million.

How does Japan stack up to its cashless promoting neighbors?

The strong cash dependency in Japan is in stark contrast to other countries in the region, especially its closest neighbors.

Cashless Payment Usage in Northeast Asia

In recent years, South Korea has become a major hub for cryptocurrency trading, despite its government taking a tough stance toward the sector. The country has become famous for the “Kimchi Premium,” referring to the fact that traders pay a much higher price for bitcoin compared to the price of the cryptocurrency on exchanges in other countries.

Even in the midst of a bleak cryptocurrency market over the past 18 months, a report suggested South Koreans were buying more digital currency in April 2019 than in previous years. The country’s central bank survey revealed cash payments only accounted for 20% of payments made in the peninsula last year.

In his correspondence with Cointelegraph, Tashiro argued South Korea’s advantage in this regard is mainly down to government policies that have promoted the use of alternative payment methods, in addition to the more widespread opinion of South Koreans’ appetite for the fast adoption of new technology.

“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.”

China is also on track to becoming a cashless society. This is largely due to the presence of two of the world’s biggest companies, Tencent and Alibaba. The two tech giants enjoy a near monopoly on the country’s messaging and payment applications, respectively dubbed WeChat Pay and Alipay.

By 2017, there were media reports that nearly three quarters of Chinese people were using digital payment methods over cash. Just to indicate how popular WeChat Pay had become, data from an Ipsos survey in the same year showed it had become the leading smartphone application for Chinese consumers to make payments with over 1 billion active monthly users.

China’s mobile transactions were far higher than that of the United States in 2017, thanks to its 1.4 billion citizens. Last year, the U.S. population was recorded at 327.2 million.

By virtue of the sheer number of users in China, WeChat Pay and Alipay have expedited the country’s transition from cash to digital payments, bypassing checks and credit cards.

Private sector as the key to Japan’s move away from cash

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

Ahead of the new sales tax increase this October, the Japanese government is taking steps to stimulate consumer spending. 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. Combined with the Japanese regulatory body’s active involvement in cryptocurrency trade, 2019 might be the year when old habits finally give way to the change of times.

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Rakuten Partners With Japan’s Biggest Railway Firm to Promote Cashless Payments

Japanese e-commerce giant Rakuten has partnered with Japan’s biggest railway firm to promote cashless payments.

Japanese e-commerce giant Rakuten has partnered with Japan’s biggest railway firm, the East Japan Railway Company (JR East), to promote cashless payments. The news was reported by Cointelegraph Japan on June 5.

The partnership will enable commuters to charge and use their rechargeable smart fare card — JR East’s “Suica” — via the Rakuten Pay mobile app.

As Cointelegraph Japan notes, the integrated service will bring cashless transport payments via the mobile app to commuters at 5,000 train stations and approximately 50,000 buses, in addition to around 600,000 stores across Japan.

According to an official press release published today, the forthcoming service is planned for launch in spring 2020. The two firms will reportedly look to future joint ventures to further promote cashless payments networks, the press release claims.

As Cointelegraph has previously reported, an update to the popular Rakuten payments app that could potentially facilitate support for cryptocurrency payments was revealed in the company’s 2018 earnings release, published this February.

Rakuten had acquired domestic crypto exchange Everybody’s Bitcoin in August 2018 in a $2.4 million deal. This January, Rakuten announced a revision to its corporate restructure, setting up a new payments subsidiary that includes its new cryptocurrency business.

Rakuten now plans to launch a forthcoming crypto exchange — dubbed Rakuten Wallet — this June, having sealed regulatory approval from Japan’s Financial Services Agency (FSA) in March.

Also in March, the FSA greenlighted Japanese crypto exchange DeCurret, which in parallel unveiled a new crypto payment system that will enable JR East’s Suica payment card to be topped up with cryptocurrency.

Notably, at the time of DeCurret’s revelations in late March, no concrete plans to roll out the crypto-chargeable Suica card had been finalized, with JR East reportedly only considering the implementation.

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Rakuten Wallet Partners With CipherTrace to Assure Safety of Its Upcoming Crypto Exchange

Rakuten Wallet has partnered with blockchain security firm CipherTrace to assure AML compliance for the company’s upcoming crypto exchange.

A subsidiary of Japanese e-commerce giant Rakuten, Rakuten Wallet, has partnered with blockchain security firm CipherTrace to assure Anti-Money Laundering (AML) compliance for the company’s upcoming crypto exchange. The development was announced in a press release shared with Cointelegraph on May 29.

CipherTrace — which develops cryptocurrency AML, forensics and regulatory monitoring solutions — will work on improving the safety of Rakuten Wallet’s investors as well as the protection of the integrity and compliance of the exchange. Dave Jevans, CEO of CipherTrace, commented on the cooperation:

“We have made significant strides as an industry to make the cryptocurrency market grow and become more trustable. Rakuten Wallet cares about its customers and will work with CipherTrace to make sure that exchanges have optimal protections for mainstream adoption. It is our hope that proper compliance, transparency and increased trust will lead to more and more participation in the global crypto market.”

Rakuten Wallet plans to launch the exchange in June. According to the company, its trading platform will allow users to trade digital assets via a smartphone application. Opening an account will reportedly be free of charge and customers’ funds will be stored in a cold wallet —  a device for storing digital currency that is not connected to the internet.

Rakuten Wallet had already opened its online account registration process for cryptocurrency trading services in mid-April, requiring traders to register with a Rakuten user ID and associated bank account.

Also in April, a source familiar with the matter told Reuters that Japan’s Financial Services Agency (FSA) will require cryptocurrency exchanges to strengthen their internal supervision of cold wallets. By implementing the new regulation, the FSA purportedly addresses the difficulties of ensuring the security of digital currencies and other risks for the country, as it intends to boost the fintech industry to stimulate economic growth.

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Rakuten Exchange Could Push Amazon to Accept Cryptocurrency

Amazon Rakuten Cryptocurrency 2019

The first four months of 2019 have already kicked off a string of high-profile acquisitions for cryptocurrency, including the development of J.P. Morgan Chase’s stablecoin. With social media giant Facebook looking to release its own coin at some point in the near future, the adoption of cryptocurrency is beginning to pick up pace.

However, investors are still unable to use their coins directly on some of the world’s largest marketplaces, including online retail goliath Amazon. For years, Amazon has been tied to false stories of Bitcoin and cryptocurrency integration, as one of the most high profile companies that has yet to put any interest towards the industry–despite being an obvious source for crypto-based transactions.

According to data compiled by Statista, Amazon had $232 billion in net sales in 2018, and is currently the most popular online store for U.S. shopper by a long margin. The sheer volume of transactions per day generated by Amazon would sky-rocket the use case for cryptocurrency, helping both the marketplace and development for coins. As it stands, a vast number of coin projects are focused entirely on cryptocurrency exchanges, where they become more like bartering chips in speculation as opposed to legitimate currencies. Having a significant marketplace for crypto transactions would give users increased incentive to spend their coins.

Even if Amazon continues to ignore the growth of cryptocurrency, their hand may be forced by the development of rivals. While, a competitor in U.S.-based online retail has accepted cryptocurrency for years, the rise of Japan-based Rakuten may ultimately prove more compelling. Rakuten has been expanding in markets around the world for the last several years and has directed a portion of their growth into capitalizing on cryptocurrency.

Already the company is accepting registrations for their new Bitcoin and crypto platform, Rakuten Wallet, which will combine e-commerce with cryptocurrency trading. According to Forbes, the company went on record last year stating their bullish position on cryptocurrency

“the role of cryptocurrency-based payments in e-commerce, offline retail and in peer-to-peer payments will grow in the future.”

Following Rakuten’s licensing approval for their Bitcoin and cryptocurrency platform exchange last month, the platform is set to launch in June 2019. While Rakuten may still be a far-cry from challenging Amazon in e-commerce for U.S.-based markets, the development of their cryptocurrency platform could lead to increased competition. At the very least, if cryptocurrency adoption goes exponential, Amazon will be exposing itself to playing catch-up, as opposed to their present opportunity to become a market leader.

Changpeng Zhao, CEO of leading cryptocurrency exchange Binance, has repeatedly expressed his view that all business will one day be forced to take an interest in token projects or cryptocurrency. In response to the recent update by Rakuten, the exchange CEO replied,

Cryptocurrency prices continue to rise throughout April, after their bullish start to the month, with Bitcoin looking to make another push towards $5300.

The post Rakuten Exchange Could Push Amazon to Accept Cryptocurrency appeared first on Ethereum World News.

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Rakuten Begins Registrations for Cryptocurrency Exchange Ahead of June Launch

Prospective users can apply for an account using an automated online process detailing requirements.

Japanese internet giant Rakuten has begun letting prospective users of its Rakuten Wallet cryptocurrency exchange open accounts, Cointelegraph Japan reported on April 15.

Rakuten, which plans to launch the exchange in June, now offers online registration for traders, all of whom need a Rakuten user ID and associated bank account to complete the process.

The company took over Everybody’s Bitcoin platform in 2018, introducing changes that allowed it to procure a license for the operation from Japanese regulators in December. Everybody’s Bitcoin had previously been cited by regulators for deficiencies in management control.

Rakuten joins a steady stream of major players preparing an entry into the domestic cryptocurrency scene, among them Yahoo! Japan, which owns 40% of forthcoming platform TaoTao, set for launch in May.

Others have added to their existing features to respond to user demand. This week, Coincheck added the first to altcoins to its over-the-counter trading desk, having launched with bitcoin (BTC) at the start of April.

Also this week, a Japanese investor financed $200 million for the owners of South Korean platform Bithumb, part of a Series A funding round.

At the same time, Cointelegraph reported on Monday that Money Forward Inc., the developer of another exchange project, had decided not to go ahead with its plans due to the ongoing cryptocurrency bear market.

“The virtual currency market has cooled rapidly and the downside risk of profitability has been increased by continuing the business,” a board statement about the decision confirmed.

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Japanese E-commerce Giant Rakuten to Launch Its Crypto Exchange in June

Japanese e-commerce giant Rakuten to launch its Rakuten Wallet in June following an approval from the financial regulator.

Japanese e-commerce giant Rakuten will launch its own cryptocurrency exchange, dubbed Rakuten Wallet, this June, Cointelegraph Japan reports today, March 29.

As per the official announcement from Rakuten, the exchange will start accepting applications for opening accounts on April 15. Rakuten Wallet is set to go live in June.

According to Rakuten, its trading platform will allow users to trade digital assets via a smartphone application. Opening an account will be free of charge and customers’ funds will be stored in a cold wallet, the press release notes.

The company finally received regulatory approval from Japanese financial market regulator, the Financial Services Agency (FSA) on March 25. The FSA granted Rakuten a license to operate a virtual currency exchange business in the country.  

At the same time, the e-commerce giant announced that its upcoming crypto exchange subsidiary was renamed to Rakuten Wallet.

The FSA recently greenlighted another local exchange, DeCurret, to start operating in April. As

Rakuten bought domestic crypto exchange Everybody’s Bitcoin for 265 million yen ($2.4 million at that time) in late August 2018. Simultaneously, the company hinted it was going to enter crypto exchange market.

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E-Commerce Firm Rakuten Readies Cryptocurrency Exchange for April Launch After Name Change

Rakuten Wallet, the successor of embattled Everybody’s Bitcoin, will go live once the current platform closes at the end of March.

Japanese e-commerce giant Rakuten has completed registration of its cryptocurrency exchange Rakuten Wallet, which will go live next month, the company confirmed in a press release on March 25.

Rakuten, which follows several major Japanese tech players in entering the crypto exchange market, renamed its product from Everybody’s Bitcoin earlier this month.

The company had acquired the exchange under the former name in August last year for 265 million yen (at the time $2.4 million).

Following a consolidation period during which Rakuten made changes to its structure, executives have now confirmed that Everybody’s Bitcoin in its current guise will cease operations at the end of March.

“Rakuten Wallet will contribute to the sound growth of the market as a virtual currency exchange company, and will further enhance security and provide enhanced services so that more customers can use it safely and with confidence,” the company stated in the press release.

Everybody’s Bitcoin had received a business improvement order from Japanese finance regulators last April as part of investigations which followed the half-billion-dollar hack of fellow Japanese platform Coincheck three months earlier.

Multiple exchanges had received such orders, which were based on reviews of security and data handling.

As Cointelegraph reported, Coincheck itself had secured a buyout from online broker Monex Group, which paid $33 million for the platform in April.

This week meanwhile, news came that TaoTao, the cryptocurrency exchange which is 40 percent owned by a local subsidiary of Yahoo! Japan, would itself begin operations in May.

Yahoo! Japan had purchased equity in the exchange, previously called BitARG, via YJFX last March at a cost of 2 billion yen (then $19 million).