Japan’s Cashless Bus Test Runs

The Japanese government is looking to turn the country’s whole public bus system into a cashless operation, and changes are already underway! In a series of announcements in early summer 2024, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) laid out its newest plans for cashless buses, and while some changes might be gradual, the MLIT is clearly looking to jumpstart their newest scheme. The first change is new policy regarding bus payment methods, which (as of July 2024) is already allowing bus companies the choice of accepting only cashless payment. But to get things started and hit the ground running, the MLIT is also picking approximately ten routes scattered throughout the country for a trial run: these bus routes will soon stop accepting cash payment and ask passengers to stick entirely to payment via IC card – prepaid cards already commonly used for public transportation of all kinds around Japan. Up until now, most public bus routes in Japan have accepted payment via either IC card (such as Suica, Icoca, or Passmo) or cash, and buses have come equipped with change machines to help passengers make exact change to pay their fare. Before long, it looks like that option will be going by the wayside, in favor of the ease and convenience of cashless payment. Even short-term visitors in Japan will want to make sure they have a Japanese IC card ready before they get on any buses!

When and Where?

Despite the quickly approaching start dates, the specific routes for Japan’s cashless bus trial still haven’t been officially announced. The general guidelines for how the MLIT is choosing its routes, however, are available for public perusal. The long-term plan is to turn all public buses around Japan cashless, but in order to verify the practicality of this plan from many angles and prevent any major public backlash, the MLIT first wants to trial the plan on a few specific varieties of bus route. The choices will include:

① Bus routes with specific limited passenger use (e.g. airport buses or routes on university/company campuses).
② Bus routes frequently used by tourists and foreign travelers.
③ Bus routes that already have a high rate of cashless payment, used every day by a wide variety of passengers.
④ Bus routes that are already experimental in other ways, including driverless buses.

Since the first ten or so trial routes will place an emphasis on buses serving high-traffic tourist areas, foreign travelers will definitely want to get themselves an IC card when arriving in Japan. Or else watch out whenever they get on a bus!

Why Are Japan’s Buses Going Cashless?

While Japan has managed to earn a reputation for futuristic tech and cutting-edge innovation, anyone who has spent any length of time here knows that the country has been slow to adopt some of the everyday modern tech that is commonplace in many parts of the world. (Insert fax machine reference here.) Cashless payment (everything from credit cards to phone apps, plus options like IC cards) is one area where Japan was behind the times for many years, but after receiving a strong push in the cashless direction during the covid pandemic, Japanese society has appeared to accept that cashless payment options are the future. Since cashless IC card payment is already the norm for most locals taking transportation in Japan, when the MLIT decided to contribute to the cashless revolution, buses were probably a convenient place to start.

But the main reasons for this new cashless plan are less related to dreams of a futuristic Japan, and more about the practical here-and-now of Japan’s public bus system, particularly the lack of funding and the huge shortage of bus drivers in recent years. Limiting payment methods to cashless IC card options actually cuts down on operation costs for public transportation systems, and it makes things much easier for drivers and other staff, who will no longer have to keep up with managing the cash that’s exchanged and used to pay for fares on board. Giving bus drivers less to worry about is better for the whole system.

^{_{Image Source: Bank of Japan}}

Even Japan’s brand new paper money designs are, perhaps counterintuitively, a major reason for Japan’s public transportation system to go cashless. The new bills – the first redesign in twenty years – come with a host of new security features that help prevent counterfeiters and keep the money in circulation for longer, but the fresh new designs cause all kinds of problems for automated ticket machines and onboard bus fare boxes. To allow passengers to use Japan’s new banknotes on the bus, the machines that collect bus fares don’t just need a major update – most of them need to be replaced entirely. Industry groups say that replacing the system on a single bus costs one to two million yen (currently around 6,000 USD, even with 2024’s extremely weak yen), which makes the costs astronomical on a national scale. Bus companies don’t exactly have the budget on hand for such a large-scale undertaking, especially with high fuel prices and labor shortages so bad that bus schedules have to be cut and scaled down due to a lack of drivers. Many public transportation networks are planning to make it a gradual change, slowly replacing the fare boxes on buses as their budget allows. For bus routes that go entirely cashless, this issue goes right out the window.

The Japanese government’s plan is still in its beginning stages – their new cashless bus policy changes have only just come into effect, and the trial routes are still a mystery waiting to be announced. Will Japan follow in the footsteps of other countries around the world and go entirely cashless in the coming years? That far-flung future has yet to be seen, but if the MLIT has its way, public buses might soon become a cashless haven in a country where – until quite recently – cash was once king.

▶︎ Information from the official MLIT announcement and NHK.

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