Japan Is Struggling To Quit Floppy Discs, Fax Machines

With its azure ocean views and terraced rice paddies, the city of Hamada, population 50,000, is far from Japan's major urban centers of Tokyo and Osaka. But Hamada is no digital slouch. Just like cities in other advanced nations, Hamada collects taxes, health insurance premiums and social security contributions from residents' bank accounts by sending invoice orders online to local financial institutions.

But in some respects, Hamada's transactions are a throwback to the 20th century. One of eight local banks the city administration does business with insists that payment instructions be handed over physically, on floppy disks. Here's what a floppy disk looks like, for anyone under a certain age:

Image Provided By: CBS News

The mylar-coated magnetic disks invented by IBM in 1967 have largely been consigned to museums in the developed world. They fit a mere megabyte of data — enough for a few seconds of video.

"Floppy disk production ended 10 years ago, and we've urged that bank to go online," a spokeswoman for the city's accounting department told CBS News. "But they cling to their old system."

Even some of the banks that have gone digital, she said, still expect all transactions to be confirmed by fax. (If you're not familiar with floppy disks, fax machines are… well, they're even older.)

But amid the pressure to move into the 21st century, Hamada is not alone. A survey earlier this year by the San-in Chuo Shimpo newspaper found that Hamada was among nine towns in Shimane Prefecture still using floppies. All told, more than half of the localities in Shimane and in neighboring Tottori, both west of Tokyo, still use floppy disks.

The towns' adherence to a half-century-old data storage method reflects the unusual staying power of obsolete technology in Japan. And the Luddism is hardly limited to the far corners of the country.

The Nikkei financial newspaper reported that some of Tokyo's 23 wards are midway through digital conversions, hastened by major banks charging stiff handling fees for hardware-based transactions.

A sales clerk at Seiwa Electric, an appliance shop in western Tokyo packed to the gills with the latest-model refrigerators, washing machines and air conditioners, showed CBS News one of their hottest-selling products: A Panasonic fax machine that retails for $189.

"Seniors love it," she said. "They can order mikan oranges from the farm and use the device to make copies."

The shop still gets plenty of mileage out of its own fax machine, too, because some of its suppliers simply dislike doing business online.

The reluctance to part with old hardware illustrates the obstacles for Japan's Digital Agency, which was established exactly one year ago this month. Led by prime ministerial aspirant and outspoken Digital Minister Taro Kono, the agency is fighting to consign the floppy disk, along with other hardware like CD-ROMs, DVDs and USB drives, to the dustbin.

Kono said a review found close to 2,000 government procedures still require business-related applications to be submitted on floppy disks or other physical media. Among other things, Japan's foot-dragging in the digital shift is hindering adoption of a national digital ID system, and degrading workplace efficiency.

Floppies and other storage hardware remain so pervasive in the world's third-largest economy that they've even featured in some infamous cases, such as last year, when the Tokyo Metropolitan Police lost two floppy disks containing personal data on 38 men who were applying for public housing.

In June, a contractor for the city of Amagasaki, in western Japan, went on an after-work bender. When he came to, on the street, his bag — containing USB flash drives with data on close to half a million residents, including their bank account details — was gone. The USBs turned up later at an apartment complex.

That was shortly after the town of Abu gained notoriety for mistakenly sending its entire COVID relief fund to a 24-year-old resident last spring.

That transfer was sent digitally. But there was a floppy disk backup.