ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Economy

Alipay out from Japan's cashless rebate program

Foreign visitors also ineligible for stimulus aimed to soften 2019 tax hike

A shopper makes a purchase via smartphone at an airport. Japan will exclude foreign services like Alipay from its domestic rewards program.

TOKYO -- Japan intends to exclude foreign digital payment services such as Alibaba Group Holding's Alipay from a rebate program for cashless purchases, a measure designed to cushion the blow from a consumption tax hike coming next October.

Visitors from overseas also will be unable to take advantage of the government-subsidized rewards program, which is aimed at promoting the spread of cashless payments as well.

Consumers who pay by smartphone, credit card or other cashless means can receive reward points worth up to 5% of their purchase value for a limited time, redeemable on future purchases, once the consumption tax is raised by 2 percentage points to 10%.

Payment operators such as credit card companies will need to cap their fees for small and midsize stores at 3.25% in order to receive subsidies for the customer rewards program, regardless of payment method. The program will be limited to companies working mainly in Japan, leaving out services like Alipay, a popular option in Alibaba's native China.

Eligibility generally will be limited to Japanese residents, as they bear the burden of the consumption tax. Foreign visitors are exempt from consumption taxes on purchases above a certain price.

Points will be unavailable for some large goods slated for separate tax breaks, such as cars. Major franchise chains like convenience stores will offer 2% reward points, in effect refunding the value of the newly added consumption tax.

The subsidies are geared to help small retailers. Besides shouldering roughly one-third of their fees to payment operators, the government also will subsidize the cost of cashless payment devices for such shops.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media