Japanese Stores Return to "Cash Only" Amid Rising Prices: A Unique Phenomenon Against Global Cashless Trends
A Surprising Reversal in the Age of Digital Payments
In 2024, Japan achieved a cashless payment ratio of 42.8%, surpassing the government's target of 40% by 2025 a year ahead of schedule. With the proliferation of credit cards, QR code payments, and electronic money, the country has been steadily building an environment where consumers can shop with just their smartphones.
However, a peculiar counter-movement is emerging: an increasing number of stores are deliberately returning to "cash only" operations—a phenomenon rarely seen in developed nations worldwide.
Annual Fees of 20 Million Yen Straining Business Operations
Seisenkann Muranushi, a supermarket in Sendai City, Miyagi Prefecture, made a bold decision in April 2025 to abolish all cashless payments and accept only cash. While approximately 30% of their customers had been using cashless options, the store was paying around 20 million yen (approximately $130,000 USD) annually in transaction fees to payment service providers.
"When we thought about what we could do as a store to help customers cope with rising prices, we decided it was better to cut our expenses and pass those savings on to our customers," explained the store manager. By eliminating cashless payment fees, they've been able to offer remarkably low prices: carrots at around 200 yen per bag, daikon radishes at under 100 yen each, and a box of tangerines for about 1,000 yen. The strategy has reportedly led to increased sales.
The Cash-Only Movement Spreads to Restaurants and Services
G.G.C., a steak and hamburger restaurant in Takasaki City, Gunma Prefecture, also discontinued electronic money payments in September 2025, limiting transactions to credit cards and cash only. The savings from reduced fees allowed them to offer free rice upgrades (previously a paid option), resulting in approximately 150,000 yen in additional monthly profits.
The Aki-Takata City Museum of History and Folklore in Hiroshima Prefecture has also adopted a cash-only policy for admission fees. When they posted on social media that "While this is indeed the age of cashless payments, please understand it is not a given," some criticized them for being outdated. However, through careful communication with visitors, they've gained understanding for their decision.
The Reality of Cashless Payment Fees in Japan
Cashless payment fees in Japan vary by payment method and business size, but generally hover around 3% of the transaction amount.
Typical fee rates include:
- Credit card payments: approximately 3.0–3.25%
- QR code payments (PayPay, etc.): approximately 1.6–1.98%
- Electronic money payments: approximately 3.0–3.5%
Additional costs may include transfer fees for receiving sales proceeds and monthly terminal rental fees. For retail stores and restaurants operating on thin margins, these expenses represent a significant financial burden.
According to a survey by Japan's Ministry of Economy, Trade and Industry, stores generally tolerate fees up to about 5%, but beyond that threshold, they begin considering a return to cash operations.
Global Comparison: Why Does Japan's Cash Culture Persist?
Comparing cashless payment ratios worldwide, South Korea leads at approximately 99%, followed by China at 83%, the United Kingdom at 64%, and Australia at 68%. Japan's 43% remains relatively low among developed nations.
South Korea implemented aggressive policies to promote credit card usage following the late 1990s Asian financial crisis. Measures included making a portion of card spending tax-deductible and mandating that businesses above a certain size accept card payments.
In China, counterfeit currency was a widespread social problem, and the highest denomination bill (100 yuan, approximately $14 USD) made cash transactions inconvenient. These factors contributed to the explosive adoption of smartphone-based QR code payments.
Japan, by contrast, enjoys extremely high trust in its currency, with counterfeit bills being exceptionally rare. The convenience of ATMs throughout the country and the famous safety that sees lost wallets returned intact also support the enduring cash culture.
Strong Cash Preferences Among Elderly Consumers
Street interviews conducted in Sugamo, Tokyo—a neighborhood known for its elderly population—revealed strong preferences for cash among older consumers.
"I feel more secure shopping with cash. With cashless payments, I tend to overspend," said a woman in her 70s. Another woman in her 80s explained, "If I drop my card, it would be terrible, so I try not to carry them around."
At a clothing store in Sugamo's shopping district, over 80% of customers choose to pay with cash. A store employee candidly shared, "Customers casually use their cards because they earn points, but we're thinking about the fees we have to pay for each transaction..."
A New Business Strategy for the Era of Rising Prices
As continuous inflation persists, retail stores and restaurants are exploring various cost-cutting measures. While the return to "cash only" may appear to go against the times, it delivers clear benefits through lower prices for customers.
However, challenges remain in serving customers who prefer cashless convenience—particularly the growing number of international tourists. With over 30 million inbound visitors annually, there are many situations where accommodating diverse payment methods becomes essential.
How to balance cash and cashless operations—this has emerged as a new challenge for store management in an era of rising prices, and the debate is likely to continue.
What About Your Country?
In Japan, some stores are returning to "cash only" as a measure against rising prices. What's the situation in your country—is cashless or cash payment more common? And what discussions are happening about transaction fees for merchants? Please share your thoughts in the comments!
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Reactions in Japan
I'm actually happy that cash-only stores are increasing. Cashless was convenient, but it increased the burden on stores. If prices go down, I'm totally fine with paying cash.
This is going backwards in time... Considering the hassle of going to ATMs, cashless is way more convenient. Shouldn't payment companies lower their fees instead?
When shopping with kids, getting money out of my wallet is surprisingly difficult. I appreciated being able to tap and pay with one hand. But if it means lower prices... it's a tough choice.
Honestly, I want to stop accepting cashless too. Monthly fees of tens of thousands of yen really add up. But it's hard when customers ask 'Don't you accept cards?'...
I feel more secure with cash payments. I don't really understand smartphone operations, and it's easier to manage my money. I'm honestly relieved that cash-only stores are increasing.
While the government aims for 80% cashless, the reality on the ground is going the opposite direction. This is the consequence of neglecting the fee problem. SME support measures are needed.
This is troublesome from a tour guide's perspective. Many foreign tourists don't carry cash and dislike the hassle of currency exchange. At least tourist areas should accept cards.
3% transaction fees are actually high compared to overseas. Many European countries have rates around 1%. Japanese payment companies should be more competitive.
I was using cashless for the point rewards, but if products themselves get cheaper, that might be better. A 5% price cut beats 1% point rewards!
Fascinating phenomenon. Where does the difference between Korea's 99% and Japan's 43% come from? Beyond fees, cultural background and policy differences likely play a big role.
Considering disasters, you should keep cash on hand. Many people have experienced cashless systems going down during power outages. Balance is important.
The izakaya where I work part-time also switched to cash only. Honestly, closing the register got more complicated, but if it helps the business, we have to cooperate.
Returning to cash to cut fees is putting the cart before the horse. Proper management means improving efficiency through DX in payments. That said, I understand SME struggles.
Three stores in our shopping district have returned to cash only. In areas with many elderly customers, this is actually often more appreciated.
Honestly, this hurts the industry. But fee transparency and reductions are an unavoidable trend. Regulations like in Europe might be coming.
In the UK, more stores are refusing cash, creating the opposite problem. There's criticism that elderly and low-income people are being excluded. Japan's balanced approach might be worth learning from.
From the perspective of Korea having achieved 99% cashless, having almost no option to use cash is also inconvenient. An environment like Japan where you can choose might actually be valuable.
In China, too many stores not accepting cash became a problem. The government even issued a notice prohibiting cash refusal. Japanese stores returning to cash is interesting.
As a US small business owner, I relate to this. Payment fees really eat into profits. Especially Square and Stripe's 2.6-2.9% is tough for small shops.
Sweden is a cashless pioneer, but recently there's debate that 'not being able to use cash is a human rights issue.' Japan's movement might be forward-thinking.
As a German, I'll say that preferring cash is nothing to be ashamed of. From a privacy standpoint, untraceable cash payments have value.
In France, there are fee regulations for small transactions, reducing the burden on stores. Shouldn't Japan consider policy intervention too?
In Brazil, the spread of PIX (instant payment system) reduced fee issues. Japan should also create a government-led low-cost payment system.
In Australia, stores refusing cash are increasing, creating 'cashless discrimination' issues. Japanese stores returning to cash for customers is, in a way, admirably customer-first.
I'm a Japanese living in the US. Cashless is convenient here with tipping culture, but I miss Japan's reassurance that 'cash is fine too.'
India has UPI, a free instant payment system. With zero fees, there's no cash return like in Japan. A technological solution should be possible.
Small bars in Spain have similar debates. Tourists want to use cards, but fees hurt. In the end, every country has the same problems.
The Netherlands has iDEAL, an interbank payment with low fees. If Japan creates a low-cost banking system, this problem might be solved.
Singapore's government promoted PayNow to solve fee issues. Japan's government should be more actively involved. Leaving it to the private sector has limits.
Payment fees are also an issue in Taiwan. But night markets still have strong cash culture, so it might feel similar to Japan. Asia has high trust in cash.