"I put a new 500-yen coin into a vending machine but it was rejected." Some people may have had this experience. Although the new coins have been in circulation for more than a year, many vending machines and money changers in Kyoto City still do not accept them. We have investigated the reasons for the delayed upgrades.

"New 500-yen coins are not accepted," state stickers attached to fare boxes on approximately 520 buses of Keihan Bus Co., Ltd., (Minami Ward, Kyoto) which operates bus routes in and around the city. The company has posted these to warn passengers not to use the coins since October 2021, prior to their issuance. Kintetsu Bus Co., Ltd., (Higashi-Osaka City, Osaka Prefecture) another bus operator with routes in the city, has not yet made their system compatible with the new coins, either.

The newly designed coin was put into circulation in November 2021. It has anti-counterfeiting features, such as a two-colored, bimetallic structure and unevenly spaced ridges on the contour edging. As the new structure differs from former designs, modifications are required for them to be read by cash handling equipment, including vending machines.

A Keihan Bus spokesperson said, "We have shelved the refurbishment from the viewpoint of cost-effectiveness." The cost of upgrading money changers is approximately 100,000 yen per machine. It would take more than 50 million yen to modify all the buses' machines. Another reason is that cash payments are decreasing due to the increase in use of smart cards.

It is not only some bus money changers that do not accept the new coins. Our reporters checked 50 beverage vending machines in Kyoto City and found that only four of them accepted the new coins.

Even at coin-operated parking lots it isn't widespread. Kyotec Co., Ltd., (Shimogyo Ward, Kyoto), which operates 487 car parks in Kyoto Prefecture, reveals that only around 10% of its parking meters are compatible.

According to the Japan Vending System Manufacturers Association, a Tokyo-based industry group of manufacturers of vending machines and cash-handling equipment for financial institutions, the renovation of ATMs, ticket vending machines at train stations, and self-checkout machines has generally been completed.

On the other hand, there have been few requests from users of bus money changers, vending machines, etc. and many owners reportedly have not upgraded them due to cost considerations.

The association also points to the low volume of new coins in circulation as another reason. According to the Ministry of Finance, approximately 200 million new coins were issued in fiscal 2021, with another 360 million scheduled to be added during fiscal 2022. As of November 2022, approximately 4.6 billion old and new coins were in circulation, with new coins accounting for only about 10% of the total.

Some businesses are considering upgrades at the timing of the issuance of new banknotes, such as the 1,000-yen bill, in fiscal 2024. However, as coin validators and banknote validators are different, an association representative said, "If they choose to refurbish both validators at the same time, they will have to bear both costs anyway. It is unclear whether refurbished coin validators will become more widespread when the new banknotes are issued. I guess many businesses are watching the volume of coin circulation to decide whether to upgrade their systems."