The introduction of the Japanese government’s Cashless Japan initiative, which provides consumers with cashback incentives when they use a card or mobile phone to make a purchase, has led to a significant upswing in mobile payments adoption, according to reports from a number of merchants and mobile payments providers.

Launched on 1 October, Cashless Japan lets consumers avoid a new increase in sales tax from 8% to 10% by selecting a non-cash payment method when they check out at any of some 500,000 merchants around the country.

Convenience stores are already seeing a 50-60% increase in mobile transactions, the Nikkei Asian Review reports.

“Online retailer Rakuten saw first-time users of its Rakuten Edy prepaid card quintuple on 1 October from the average for the preceding three months,” the publication reports.

“Sign-ups for Line Pay, offered by the chat app Line, soared 180% on 1 October from a month earlier. Used-goods app Mercari said its Merpay service signed up four million customers in September, doubling over the preceding quarter. PayPay, a service affiliated with mobile carrier SoftBank Corp, gained five million new members in just two months from August to 1 October, bringing the total to upward of 15 million.”

The government-funded project provides consumers with a rebate of 2% of the total purchase amount at major retailers and 5% at small- and medium-sized merchants and is available until the end of June 2020.

Its goal is to move Japanese consumers away from cash and towards non-cash payments. Some 80% of transactions conducted in Japan were made in cash in 2016 and the government aims to reduce that to 60% by 2025.

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