A surge in online shopping in the wake of the novel coronavirus pandemic in Japan has resulted in a shortage of credit card numbers in the country.
According to a report published by the Mainichi Shimbun newspaper, coming up with original 16-digit numbers for credit cards is becoming increasingly difficult for the country’s credit card companies with consumers changing shopping habit very fast and forsaking regular shop visits and choosing to use the plastic card more compared to hard cash.
A new point based system that was a part of a government campaign to encourage cashless payments and launched in October last year is also being linked to the rise in credit card usage by Japanese consumers. That program as launched after the Japanese government raised consumption (sales) tax to 10 per cent from 8 per cent.
Credit cars that have 16 digits are issued by most of the 280 credit card companies in Japan so that those cards can be used with international partners such as Visa and Mastercard.
Out of the 16 digits, the first six digits denote the country, brand and other information while the remaining 10 digits contain the account number and type of account. The later 10 digits are decided by the credit card issuer.
The newspaper report quoted credit card companies warning of a possible shortage of combinations from the seventh-digit onwards because of a surge in card issuances.
Every year, the usage of credit cards in Japan increases by about 2 per cent. In the first half of this year, there was a boost in the number of users because more people were forced to stay back home on government orders in an effort to control the spread of the pandemic.
And with Japan trying to end its addiction to cash, it is expected that usage of credit cards in the country will continue to rise. Many consumers in Japan, especially older people, find it more comfortable to carry around large quantities of cash.
According to the plans of Japanese Prime Minister, Shinzo Abe, the ratio of cashless payments is desired to be doubled in the country to 40 per cent by 2025, and eventually to 80 per cent.
According to a 2019 survey, notes and coins for small purchases in Japan is used by 84 per cent of households despite the growth in electronic payments. The survey also found that 48.5 per cent of the consumers said that they paid in cash for payments of over 10,000 yen and up to 50,000 while electronic money, including credit and debit cards was preferred by only 3.4 per cent consumers.
According to the Payments Japan Association, an industry lobby group, compared to South Korea and China with 96 per cent and 66 per cent of all transactions being done in cashless format, the ratio is only at about 20 per cent.
“Although we want to do everything possible to avoid increasing the number of digits, I think that ultimately, our only choice is to carry the financial burden ourselves,” a credit card company executive told the Mainichi.
(Adapted from TheGuardian.com)