The Hidden Intentions of the Ministry of Health, Labor and Welfare Behind the Start of Digital Salary
Sending money via PayPay for support.
Maruko Izumi, who operates a “Living and Money” consultation room in the Tokyo metropolitan area, has a student daughter. She mentioned, “I ask my daughter what she wants for her allowance, and depending on the month, I sometimes send money via PayPay instead of her bank account.” Unlike bank transfers, there are no fees, and it’s convenient if her daughter plans to use PayPay. She added that some of her daughter’s friends also receive their allowances via PayPay from their parents.
Maruko, a first-class financial planner, also noted:
“Younger people often prefer to receive their part-time job wages entirely through PayPay. There’s a generational difference in how familiar they are with electronic money. Young people who haven’t opened a bank account likely welcome payments via PayPay.”
To use PayPay, one needs to download the app on their smartphone and can fund it through cash at designated banks or directly from their bank account. When paying for products or services, users scan a QR code with their smartphone. This means there’s no need to carry a wallet as long as you have your phone.
In Japan, which has been lagging in cashless payments, the use of QR payments and electronic money for shopping and service fees has been increasing. The preference for contactless payments during the COVID-19 pandemic has led to wider adoption, and some electronic money services offer incentives like points based on usage amounts, which are also appealing.
Digital salaries have been allowed since August. Are there people who insist on using only electronic money?
Due to the rise of electronic money, the system has recently been revised to allow workers to receive their salaries not only in cash but also through electronic money. In August of this year, PayPay was recognized as a form of electronic money that can be received, and SoftBank Group companies have begun offering a PayPay salary receipt service for their employees.
Digital salary payments are based on the hopes and consent of the workers. In addition to PayPay, other electronic money options like Rakuten Pay are awaiting approval, indicating that the range of options is likely to expand. What benefits does digital salary provide to workers?
According to explanatory materials from the Ministry of Health, Labour and Welfare, the introduction of digital salaries is backed by the spread of cashless payments and the need for diverse remittance methods, particularly highlighting the elimination of the hassle of having to charge electronic money oneself.
Regarding digital salaries, a wage-related official from the Ministry of Health, Labour and Welfare stated, “There is a certain level of demand, and it is one of the options. If someone wants their salary to be deposited this way, they can use it.” Furthermore, for part-time workers and day laborers, who have previously been paid in cash daily, electronic money will become an option for payments in the future.
Regarding the introduction of digital salaries, Mika Koizumi, Product Manager and Head of Financial Relations at Free Inc. (Shinagawa, Tokyo), stated, “The hassle of charging electronic money is eliminated, making it one of the options.” She mentioned that not only general workers but also the increasing number of foreign workers in Japan may find it difficult to open a bank account immediately, making it desirable to receive wages not only in cash but also through electronic money. To open a bank account in Japan, foreigners are typically required to have a residence period of a certain length, a residence card, and a certificate of residence.
