Japan is planning to start allowing companies to pay wages to digital payment apps like PayPay and Rakuten Pay from April, the labor ministry said Wednesday, in a bid to promote cashless payments as a way to stimulate the economy.
The maximum balance of such digital wallets will be set to 1 million yen ($6,800), with employees able to use the funds to make purchases or remittances directly.
The upper limit was determined amid concerns that app users cannot be protected sufficiently. Unlike banks, operators of the apps are not subject to the nation's deposit insurance system, which covers principal of up to 10 million yen in case of bankruptcy.