Life in Japan: Where cash is king (or rather the shogun)

If you have a foreign ATM, not all of these machines will work for you. Photo from Sapporo International Airport

Here is another installment in my series of posts about “Life in Japan”.

Paper and coins rule in Japan

One of the surprising things about moving to Japan is how much the country Japan remains a paper-money based society. This is one of the big contradictions and contrasts that I find in everyday life here.

It’s hard to believe how much cash I carry around – and go through – every week!

I visit one of these at least once a week...
I visit one of these at least once a week…or more!

I’m always grateful that Japan is as safe of a place as it is, as I’m never worried about theft (safety of Japan will be the topic of another post).

Many restaurants that take credit cards in the evening insist on cash payment during the day, many stores flat-out don’t take credit cards.

If you go outside of Tokyo it’s even more acute. For example, a train station about 100 kilometers away from Tokyo would only take cash to book train tickets (totaling about $100). If I hadn’t had my regular stash of cash, we would have been in trouble!

You want money? Think again…

Have you ever visited a country in the past five years where your bank card wasn’t accepted? Until coming to Japan, I hadn’t!

I haven’t used a money exchange or travelers checks in at least 20 years…. No matter what country I visit, I just go to an ATM upon arrival and am set.

Not so much for visiting Japan!

7-Eleven, my bank
7-Eleven, my bank

Japanese ATMs don’t like gaijin cards

Even more challenging as a foreigner (or “gaijin”) in Japan, I cannot use regular Japanese ATMs to withdraw money. For whatever reason, Japanese banks do not usually accept foreign ATM cards. Have you ever seen this in another country?

This poses a real challenge as a Japanese resident who does not have access to a Japanese bank (see below) and has to withdraw money regularly to survive in this cash-based life.

7-Eleven saves the day

Only ATMs at 7-Eleven stores and former Citibank branches (Citibank was just bought by a Japanese bank called Aeon, so it’s unknown what will happen to these ATMs) will process foreign ATM cards.

With the high use of cash and limited access to ATMs, I go to 7-Elevens more than I ever would have imagined! We make at least a weekly – if not more frequent – visit.

We were just in Hokkaido (Japan’s northern island) over New Years. A ski resort town popular with Australians and other foreigners has only one ATM in the whole town. This ATM is actually just a stand-alone 7-Eleven ATM inside of a hotel, not inside of a 7-Eleven store. The line was long at all times to get access to cash!

You want cash, but you can’t get an account

If you have a foreign ATM, not all of these machines will work for you. Photo from Sapporo International Airport

Despite being so cash-reliant, banking here in Japan is a challenge too, as someone recently also wrote about in the Japan Times.

While we have a Japanese bank account, we only use it for rent and utilities. Or rather, I should say that my husband has a Japanese bank account… I am not even registered on the Japanese bank account as it was more challenging as the “dependent” spouse to get me registered or have access – another throwback to very traditional male vs. female divided society…

So, to exist in this cash society I really need to rely on my foreign ATM when credit cards aren’t accepted. Hence, 7-Eleven is part of my weekly routine.

Contrast to credit based society

Contrast to life in Silicon Valley, where I rarely take cash out of the ATM. I pretty much pay for everything on my credit card (which I use as a debit card as I pay every monthly balance on time) back in the U.S..

My banking in the U.S. is done online (though it is archaic that personal checks are so heavily used in the U.S. still), though it is even easier in Australia where direct payment to friends can be done as free bank-to-bank transfers.

U.S. Challenge – Could I live for a week on credit only?

I was just in the U.S. for eight days and challenged myself to go the whole time without having to visit an ATM or use any cash.

I was doing great up until Day 6 when I had to visit an ATM…. Turned out that a minor alteration I got done at my hometown tailor only cost $3 and they wouldn’t take a credit card. So for the price, I broke down and went across the street to the ATM. I needed cash to pay our babysitters anyway….though I bet they would have taken PayPal if I’d asked!

Is Japan behind, or just getting ahead faster?

An interesting contrast in this highly based cash society is that the Japanese are very high tech in the use of prepaid cards to pay for many things.

Perhaps Japan is just leapfrogging credit card technology.

In many cases, stores, subways and supermarkets take preloaded cards called Suica or Pasmo. You just tap the card over the sensor and your money is deducted. Even easier than a credit card as you don’t have to actually take the card out of your wallet.

They are on to something here! Who needs a credit card to be swiped when you can just tap and go?

How does this relate to Lean and kaizen thinking?

How does Japan’s reliance on paper money relate to Lean and kaizen thinking?

It’s a stretch…

Some of the phrases and concepts that my early Lean coaches taught me, who learned from Japanese kaizen senseis, include:

  • “Use our minds first, not our money” – meaning, use our creativity first before buying a fancy new machine or computer “solution” (so why not stick with paper money?)
  • Use simple paper or whiteboard tracking tools to make work visible rather than a fancy spreadsheet that in buried in the computer (paper is more visual…)

I’ve been thinking about these concepts and phrases in relationship to the Japanese use of money and paper systems, but it’s a stretch… I know that payment systems are complicated and different governments incentive the development of these systems differently.

Perhaps there is an element of staying with tradition and simpler systems. I do also think there is an element related to tactile object appreciation, which I’ll be writing about in a future post.

But for now I’ll just chalk it up to an interesting contrast of life in Japan

What do you think?

If you have any insights into why paper money still rules here – or why it is so challenging as a foreigner to use banks in Japan – I welcome your insights in the comments below!

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Katie Anderson
About Katie Anderson 127 Articles

Lean thinker and coach. Passionate about developing people. Healthcare change agent. Living in California again after 18 months in Tokyo. Writing about lean and leadership.

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  • sketharaman

    We keep hearing that Japan and South Korea have a lead of 5-5 years over the West in mobile payments. At the same time, cash is still heavily used in Japan. I don’t see this as a contradiction. Instead, I see it as a reinforcement of my oft-held belief that consumers are comfortable with multiple payment options and choose the one that most suits their present context. This totally belies the notion held by fintech startups and pundits that a newer payment method (e.g. mobile payment) is thoroughly superior to and will kill an older payment method (e.g. cash).

  • Eric Chan

    Why use credit card when your credit card number is printed on the card and can be stolen to buy things while the too-big-to-fail VISA and MasterCard require the merchant to secure the credit card number when this is simply a design flaw? What kind of obsolete technology is that?

  • Thanks for your comments and appreciate your points. One counter consideration is that consumers in many cases *aren’t* given a different payment option besides cash. As Japan prepares for the 2020 Olympics, it will be interesting to see if other payment options are offered more broadly, given many foreigner’s reliance on electronic or credit card payments. And certainly more ATMs will be able to accept foreign ATM cards – or else 7-Eleven is going to win in the market.

  • Eric – thanks for commenting. I don’t believe that credit cards are the best payment option and there are many design flaws. I welcome better technology! However, only accepting cash will become a challenge for Japan as more foreigners visit. See my comments below regarding the 2020 Olympics.

  • sketharaman

    I hope you’re right about 2020 Olympics but, going by what happened in London four years ago, I’d rather stock up on 7-Eleven stock! In the run up to London 2012 Olympics, there was a lot of buzz around mobile payments. In fact, if my memory serves right, the pendulum swung to the other extreme and cash was actually banned in all stadium concession stands. Despite all that, cash didn’t go away. In fact, according to some recent reports (Appetite for cash remains strong as ATM usage soars,, cash usage is predicted to increase in UK.

    But I totally agree with your basic point about the need to give more payment choices to the consumer. That said, in case you’re referring to a US payment card, there are some unique challenges with using them outside USA, as I’d highlighted in my blog post titled “Is The US “Closed Loop” Payments System Making Americans Less Creditworthy?”

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  • CR

    They’re smarter than us Westerners where credit is cheap and we spend money like drunken sailors,as they say. Speaking of “tactile object appreciation”, Japanese know it’s psychologically much harder to part with actual paper money than when using plastic and so they hang on to that tradition. Smart. And of course there are still a lot of tiny mom and pop enterprises where margins are lean. Why pay the banks?

  • Jan

    It really is a good question. I recently butted heads with the ‘system’, but did manage to rescue my wife.

    I’ve just come back from a short holiday in Japan. I consider myself an experienced traveller. And even though this was my first trip to Japan, I assumed that the high-tech Japanese would accept credit cards everywhere and that there would be batteries of ATMs on every block. Thus I packed my usual financial ‘arsenal’ which consists of an ATM card, a credit card, a backup credit card (in case the main one gets blocked for suspicious activity) and US$300 in cash.

    With that packed I’ve never had a problem. Anywhere.

    (The only other ‘cash’ I took with me was a pre-paid Japan Rail Pass which allowed me to travel on JR railway lines without having to purchase individual tickets – a ‘must’ if you plan to travel to travel to other cities by rail. Must be purchased outside of Japan.)

    But, back to the main story. Imagine my surprise when I wanted to pay for our first meal at a restaurant. I proffered my credit card for payment and got my first Japanese ’NO!’ which consists of two forearms crossed to make an ‘X’ and a verbal ‘No credit card’, but with a smile of course. I eventually found a 7-Eleven and was able to release my wife from hostage.

    I stumbled on your article while I was, being a curious sort, searching for an answer to the very question you attempt to address. I was about to move on after reading it, when it struck me that there may be a clue in the Philippine situation.

    It didn’t strike me immediately as I’ve lived in South Africa most of my life and South Africa has a very convenient e-banking system – personal cheques are very uncommon because they are simply not needed (and are in any case always accepted with suspicion) – if you want to send someone some money or pay a bill, you simply make an online transfer. By comparison the Philippine banking system is Neanderthal, but credit cards can be used widely and batteries of ATMs abound, for Filipinos do circulate a lot of cash.

    And then just this morning my wife drew a huge wad of cash, more cash in fact than I would have used in 5 or 6 months.

    And I asked why.

    “It’s kipkip” she says. “Oh” I remembered. The word ‘kipkip’ refers to hiding something away by tucking it into a small space. In this case, she was using it to refer to ‘emergency’ money which is hidden in an unused corner of a wallet or handbag. It’s much less common for ATMs and credit card pay-points to go offline these days, but it does still happen more often than my patience levels can put up with.

    But, although there’s no parallel between the state of telecommunications in Japan and the Philippines, both countries are subject to huge and widespread natural disasters.

    Earthquakes, floods, landslides and typhoons constantly threaten both countries and the effects are often extremely disruptive. And always unpredictable. Power supplies and telecommunications lines are frail against these events and do not withstand the anger that the earth can throw at them. Not yet.

    And once water has seeped into an electronic device, well, the device is never really the same again – especially if it’s sea water and both countries, being archipelagos, have a lot of that.

    And this is when cash re-asserts itself as King (or Shogun).

  • Jan

    Japan will also host the Rugby World Cup in 2019. This will likely expose Japan to a deluge of credit card carrying foreigners as a sort of dress rehearsal for the Olympics.

    Of course, the numbers will be different, but rugby supporters can be a little boisterous.

  • Thanks for sharing your story, Jan. I have been living back in the U.S. for six months now and I hardly ever use cash. I had to remind myself to take out the maximum from the ATM when I was back in Tokyo in October for a wedding! Japan is full of unexpected contradictions and contrasts of old and new – it is part of the charm (and sometimes frustrations). I hadn’t thought about the natural disaster angle as a reason for the reliance on cash…I wouldn’t be surprised if that was a factor.