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Many Merchants Start Accepting Credit Cards

By Kevin Sullivan and Mary Jordan
Washington Post Foreign Service
Wednesday, February 4, 1998; Page C3

NAGANO — Cash: the Japanese don't leave home without it.

Whether they're going to buy a car, pay college tuition or bribe a public official, the Japanese do it with cash. Lots of cash. Stacks of bills worth thousands of dollars.

"Cash can't go wrong," said Tashi chi Kitazawa, who runs a pharmacy on the busy shopping street just outside Zenkoji Temple, the 1,400-year-old symbolic backdrop of the Nagano Games.

Kitazawa and the other merchants on his street began accepting credit cards last summer, at the urging of the Olympic organizers who value Visa as an official Olympic sponsor and who worried about a million card-happy foreigners swooping in for the Games. Kitazawa's customers can now purchase an $80 box of Ginseng tablets or a $10 health tonic with Visa if they want. But in the six months that the credit card machine has been sitting on the counter, it never has been used. Not a single customer has paid with a card, and that's fine by Kitazawa.

"We did install it for the Olympics, but if possible I'd like to be paid in cash," he said.

Credit cards are catching on in Japan, especially among younger people and especially in big cities. Most Japanese on the streets of Tokyo probably have a major credit card in their wallet. But only about 5 percent of Japanese consumer spending is done with credit cards, compared with 21 percent in the United States, according to American Express.

And in relatively small cities such as Nagano, many people still regard credit cards as a bizarre substitute for real money.

"I think it's so strange; I guess westerners don't use cash," said a woman running a souvenir shop at the Nagano train station, who observed that, "People who speak English tend to use credit cards."

To the amazement of Japanese shopkeepers, foreigners showing up for the Olympics are pulling out plastic credit cards to pay for souvenirs costing less than $10. To many visitors, familiar cards are easier than dealing with all those zeros on Japanese yen.

But the Japanese are famous for their hospitality, and Nagano, caught up in the Olympic spirit, is trying its best to accommodate what many locals see as another oddball foreign quirk. Stores all over town are sprouting little window stickers showing that they accept credit cards, and shopkeepers are even wearing their blue-and-yellow freebie jackets from Visa. As an official sponsor Visa is assured of exclusive rights inside the Olympic Village, but other credit card companies can compete elsewhere in the city.

Visa spokesman Jeff Perlman said an eight-month marketing effort has resulted in 2,600 new Nagano area businesses that now accept Visa.

"When we first came here two and a half years ago, you could not find one Visa sign in a window, and if you showed somebody a Visa card at a restaurant, they looked at you funny," Perlman said.

Mitsuo Inagaki, an American Express spokesman in Tokyo, said that in the past 18 months, the number of businesses in Nagano that accept his card has more than doubled to 871.

Inagaki insists that its not Visa or MasterCard that worries him most. Out there in the Japanese retail trenches, he said, "Our largest enemy is cash."

Japan has always been a cash society, partly because it's so safe here. Last week, a New York cab driver made national news in America because he turned in a purse containing $10,000. That kind of thing happens every day here. Honest Tokyoites turned in more than $21 million worth of cash last year at the metropolitan police lost-and-found center.

To many Japanese, little plastic credit cards are inconvenient, cumbersome and a quick route into a sea of American-style debt. Even checking accounts are rare; people usually pay bills either by wiring money from one bank account to another or in cash.

Sadako Hatta, 66, who sells souvenirs at a shop in Nagano, does her calculating with the same abacus that's been used at the family-owned shop since before she was born. "I don't use a calculator, let alone credit cards," she said. "Young people can figure out how to use a credit card, but not me. I always deal in cash and I'm not going to change."

Cash has cachet. Some Japanese note that men particularly like to flash it around. Even with the economy in the doldrums, it's not unusual to find people in Tokyo walking around with $1,000 in their wallet. Even vending machines selling Cokes for $1 accept 10,000 yen notes-which are worth about $80.

Cash has featured prominently in many of Japan's most notorious political corruption cases. One public official took cash bribes so large that he needed a shopping cart to carry the money. One took bribes so large that he converted it into gold bars, which he hid under the floorboards of his house. Another official was arrested retrieving cash from the bus station locker where he stashed huge stacks of illegal bribes.

So the evolution toward credit has been hard, even for giants such as Japan Railways, the national railroad company. Until now, customers have had to shell out hundreds of dollars in cash for tickets-no checks, no plastic other than the charge card issued by the railway company. But in the spirit of the Olympics, JR has quietly begun accepting major credit cards at stations along its Tokyo to Nagano route. There has been no advertising and no signs in the station suggesting that cards are accepted. But if a foreign traveler shows up at the desk with no cash, a ticket agent will be happy to take a card.

"We are going to cater to our foreign customers," said Sadao Inoue, a JR employee at the Nagano station.

But hospitality is one thing, and changing old habits is another. As soon as the Olympics are over, JR no longer will accept credit cards.

© Copyright 1998 The Washington Post Company

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