Japanese banks speed up cashless push before 2020 Olympics

Mizuho, MUFG Bank, and Sumitomo have agreed to unify QR code specifications.

Japanese banks have been stepping up efforts to promote cashless payments ahead of the country’s hosting of the 2020 Olympics, reports The Japan Times.

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The country’s top lenders, Mizuho, Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., have agreed to unify QR code specifications to provide greater convenience to merchants and customer with the goal of speeding up the adoption of cashless payments.

“Ideally, we should achieve the widespread use of QR code-based payments,” Mizuho Bank President Koji Fujiwara told The Japan Times as the top three lenders call on regional banks and other smaller financial institutions to back the cashless agenda.

The government earlier set a target to double the number of cashless settlements to 40% of transactions over 10 years as credit cards, electronic money and other cashless payment methods account for a measly fifth of country’s consumer payments, trailing behind China and United States who have long jumped on the cashless bandwagon.

The move comes as the country's lenders have been grappling with less than ideal interest rate environment, draining their profitablity and pushing them to drastic branch shutdowns and ATM mergers to cut costs. 

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“Falling loan demand and a shift toward lower-risk deposits are pressuring the profitability and growth prospects of banks, and Japan's three megabanks have announced structural overhauls that will result in a reduction of their headcount by 32,000,” credit rating agency Moody’s noted in an earlier report.