Japan Faces Credit Card Number Shortage Amid Online Shopping Boom
While the pandemic has created multiple problems in the global economy, it has also fast-tracked matters of the future. As people shifted their daily activities indoors, their shopping experience and habits also changed in Japan. The country is now facing a credit card number shortage with online shopping receiving a boost.
Japan has 280 credit card companies for a population of over a hundred million. The majority of these companies work in collaboration with international firms like MasterCard and Visa. They give 16-digit numbers on their credit cards. First 6 of these digits are related to the country, company name, and other details, The next 10 digits refer to account number and type, and the memberships of the card owner with the company. As more and more people are opting for contactless transactions at home, the companies are looking at an imminent credit card number shortage.
Hey, are you enjoying our content? Want to see also some thought-provoking videos from Truth Theory? We are on YouTube, make sure you subscribe to our YouTube channel, click HERE
The usual rate of growth for credit card usage was 2% until March 2020. Japan Consumer Credit Association has mentioned that as of March, 283 million cards had been issued. This number saw a huge jump that started after the Japanese government announced a consumption tax hike in 2019. PM Shinzo Abe has the vision of pushing the current number of 29.9% of credit card transactions to 80% eventually.
Credit Card Number Shortage: Fears and Solutions
The credit card industry is happy to supply the cards but they have failed to address the other issues. They are now fearing a credit card number shortage. Some companies have tried to reuse dormant card numbers as makeshift measures. This temporary solution has many complications including identity theft. The credit card industry estimates costs running in the numbers of $94.5 million to $945 million if the system is to be reformed. And they are not willing to pass on these costs to their consumers. Hence the deadlock for now.
The only feasible way out of a credit card number shortage is to add more digits to the current 16-digit cards. The Mainichi reported a senior official of a card company comment, “Although we want to avoid increasing the number of digits as much as possible, I think that ultimately, our only choice is to carry the expense burden on our own.”
If the digits increase, the companies need to decide how the current 300 million cards would operate. They could add the extra digits to these cards or a system where types can exist needs to be put in place.
Image Credit: moovstock