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Japan to allow wages to be paid into mobile payment service accounts

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This file photo shows the Central Government Building No. 5 housing the Ministry of Health, Labor and Welfare, in Tokyo’s Kasumigaseki district. (Mainichi Kimi Takeuchi)

TOKYO — Japan’s labor ministry is preparing to introduce a system as early as next year that will allow wages to be paid into e-money accounts such as those of mobile payment services “PayPay” and “d Barai.”

The plans, which received broad consensus at a meeting of the Ministry of Health, Labor and Welfare’s Labor Policy Council on Sept. 13, were accompanied by conditions such as placing a 1 million yen cap on the balance of such accounts. A point of focus will be whether privacy and safety of the system can be ensured.

Digital wage payments entail transferring money to the mobile payment account apps of fund transfer service providers such as PayPay. Workers would be able to use these apps to make purchases.

Japan’s Labor Standards Act states that the employer must pay the full amount of wages in currency (cash). The ministry plans to revise related ministerial ordinances as early as this financial year to allow companies to make digital wage payments.

Consent of workers would be a premise for making wage payments digitally. Moreover, the maximum balance of the accounts maintained by the service provider would be set at 1 million yen, and any wages exceeding this amount would be paid into the worker’s bank account or be transferred to them by other means. Transactions starting at 1 yen will be possible from the digital accounts, and it will be possible to withdraw money from ATMs at least once a month without incurring a service fee.

According to the labor ministry, 85 fund transfer service providers were registered in Japan as of the end of August. Providers are required to guarantee funds in the event that they go bankrupt, provide compensation when there are illicit transactions, and file reports on their financial standing. Businesses that pass the requirements are designated by the minister of health, labor and welfare.

(Japanese original by Takashi Kokaji, Lifestyle and Medical News Department)

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