Innovative payments are nothing new.
The world has evolved from cash and checks to making payments with the tap of a mobile phone. Now, Japan is trying to introduce a new system to promote payments among tourists.
According to The Japan News, the nation's government plans to test a new method of payments this summer by allowing tourists to use their fingerprints when making local purchases. Visitors will register their prints, credit or debit card information and other data at airports – among other locations – then place two fingers on custom devices to authorize electronic payments. Tourists will also be able to use their fingerprints to check in to their accommodations in lieu of a passport, as required by Japan's Inns and Hotels law.
The pilot program includes 300 shops, restaurants and hotels in popular tourist locations, including Hakone, Kamakura, Atami and Yugawara. After a successful run, the government will expand the system to popular sites in Nagoya and the Tohoku region. Eventually, fingerprint payments would spread nationwide by 2020.
The Japanese government provided two primary reasons for this new payment processing solution. First, the government hopes to reduce crime rates by eliminating the necessity of keeping cash or cards on hand. Second, by having the system in place by 2020, Japan plans to promote tourism for the Tokyo Olympic and Paralympic Games. Ultimately, the Japanese government wants to increase its number of annual tourists to 40 million within the next four years.
Tourists will likely have concerns about how their personal information will be used. A government-led organization will convert all information collected through the system to anonymous data. Then, it plans to analyze how tourists move and spend throughout Japan. It's likely this information will be used to establish new policies and strategies for increasing tourism.
Test systems in place
The Huis Ten Bosch theme park in Sasebo tried a similar payment system in October 2015, The Japan News reported.
"The system has been well received by customers, including those with children, since it saves them the trouble of taking their wallets out," an official told the publication.
This statement illustrates the importance of having convenient payment methods for customers. While statistics won't show how popular fingerprint payments are until the program launches, online retailers can catch a glimpse of existing Japanese payment preferences. According to Multichannel Merchant, approximately 60 percent of online shoppers in Japan use credit cards for their purchases. Others use konbini or pay cash on delivery. Konbini are convenience stores where consumers can pay for online goods. They select the konbini option at checkout, receive a reference number and then take that verification with them to the konbini to pay.
Internet retailers must accommodate consumer preferences if they hope to receive global payments. Not doing so makes customers more inclined to take their business elsewhere. Providing multiple payment solutions not only puts customers first, it also goes a long way to ensure a business's cross-border success.