Thought of the Day - May 24 2021 - The Ripple Effect

One of the fascinating things about watching the world dealing with COVID is the ripple effect of hurried policy implementation. Just like it takes time to test a vaccine, time is also needed to properly test any new system or process. And time is a luxury we often don't have when dealing with COVID.

Case in point.

• The policy implementation: "The issuing of US stimulus (a.k.a. economic impact payments) cheques".

• The ripple: "Bank branches in Tokyo have been swamped by pensioners trying to cash US cheques".

It seems that in the hurry to issue COVID stimulus payments the US Internal Revenue Service sent thousands of payments to Japanese citizens by cheque. “I felt grateful and I thought America was amazing,” said a 75-year-old pensioner from a Japanese trading house, who worked in the US in the 1970s. He was one of many who received a $1,400 stimulus cheque.

But here is the rub. It is always interesting when you point out to Americans how antiquated the US retail banking system is. For example, it took extreme pressure from VISA, in short saying they would no longer underwrite credit card fraud, for the US to implement Chip Card protection a few years ago. Today the implementation of Contactless Payments (tap to pay) still has a long way to go in the US.

What has this got to do with the US stimulus cheques? Well, while the folk who received them in Japan may be familiar with cheques from their days working in the US, their use in Japan was phased out decades ago. And so the 75-year-old pensioner in Japan spent the following week exchanging texts and calls with friends trying to figure out how to cash it.

This included contacting the US embassy. They basically say, sorry can't help, you probably need to open up a US bank account. A number of additional suggestions are in circulation in Japan that, in most cases include a fee, can get the cheques cashed:

• You can cash the cheque with a US Paypal account but only if you have a shipping address on the account that is located in the US;

• If you know someone who can get you in, you can cash them at one of the twenty-three US military bases in Japan;

• You will probably be able to cash them if you have a US dollar account with a float higher than $2,000 with your Japanese bank.

And now, after all this work, the lucky recipients are hearing that they may have received the funds in error and now need to figure out how to return the money to Uncle Sam. I guess the ripples just keep flowing.

Cheers

Cliff