Companies in Japan are facing quite an exciting issue amidst the pandemic: they are running out of credit card numbers to issue to the consumers owing to a surge in the cashless payments and online shopping over the year 2020.
The companies normally issue a 16-digit original number. First, six digits of this comprise the brand and other information, and the remaining ten digits denote the type of account and membership of the account holder whereas, the credit card companies determine these last digits. However, owing to a rise in issuance of cards, it’s becoming seemingly impossible for the credit card companies to come up with unique numbers.
The rise in online shopping and cashless payments in Japan is not just the consequence of the pandemic. The government’s measure of introducing a reward system in just October 2019 has also contributed much towards the sudden acceleration of credit card consumption. Shinzo Abe, the prime minister of Japan, wanted to increase the proportion of cashless payment from 40% to 80%, reducing the addiction that Japanese consumers mostly had with keeping in cash home leading to the lesser circulation of money in the economy.
17-Digit Introduction:
The companies are planning to increase the overall credit card digits to 17 instead of 16. Putting this into effect could mean an estimated cost of around 10-100 billion yen to be borne by the government alone. Passing it on to consumers would only mean bringing back their year-old addiction.
Also, the companies are yet to decide how to go about the 17 digit change. Continue these along with the 16 digit cards or discontinue the 16 digits one and reissue all cards. There is a cost attached to whatever the companies decide. Either it would be in terms of a rise in expected forgery or a decrease in velocity of circulation of the money in the economy.
The industry and the government need to think about this in great detail and figure out how can the change if necessary be implemented without confusing the customers too much or resulting in financial loss for any of the parties, whatsoever.
Pakistan Credit Card Usage:
Credit card penetration in Pakistan is just around 4% of the total penetration of all kinds of plastic money. This percentage constitutes a total number of 1.7 million credit cardholders across the nation, making purchase payments via it.
