Employees in Japan can receive wages through e-wallets from April 2023
To promote a cashless society, Japan plans to allow firms to dole out wages through e-wallets like PayPay and Rakuten Pay from April 2023 onwards. The maximum balance of such digital wallets will be set to 1 million yen (US$6,800), and employees will be able to use the funds to make purchases or remittances directly.
The government has set an upper limit amid security concerns. Unlike banks, operators of the apps are not subject to the nation’s deposit insurance system, which covers a principal amount of up to 10 million yen in case of bankruptcy, reports Kyodo News.
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Although the legislation is set to take effect in April, the implementation is unlikely to start until a few months later. App operators must go through a screening first, and companies considering this form of wage payments will also have to obtain consent from their employees, said the labour ministry.
Under circumstances of bankruptcy or unauthorised transactions, the operators will be required to immediately transfer the balance exceeding 1 million yen to bank accounts and fully compensate for such losses.