Within the context of the Japanese market (i.e. However, they are increasingly NOT free and often incur fees of a few hundred yen per paper or statement. 75% of the over 127 million Japanese have purchased products online at least once. As a result of more stores accepting foreign-issued cards to accommodate tourists, Japanese consumers have also benefitted, as they are now able to go cashless at places they previously could not. With a majority of Japanese accustomed to using transit smart cards for their daily commuting needs as well as quick purchases at vending machines and in-station convenience stores, the combination with the now indispensable smartphone was a perfect match. Besides payment processing, 2Checkout also covers support and legal issues: Copyright © 2020 2Checkout Inc. All rights reserved. Why is Japan lagging behind so much in this regard, compared to other countries? This is not even a full list and new services are constantly entering the market. In order to keep an overview of the active & recent ideas in this forum, we will close this idea for now. First off, high transaction fees for payment processing of cashless options presents a significant hurdle for wider adoption among small businesses and retailers, especially those with low margins. 1. Having witnessed firsthand the awkward situation where all of the payment methods EXCEPT the one a customer uses is accepted at a store, and said individual was not carrying cash or credit, new entrants may in fact be doing more to strengthen the argument for the tried and true reliability found in other payment methods. Currently, no single mobile payment solution on the market has really made a convincing argument for supremacy among Japanese consumers. Smartphones totally disrupted the cellphone market in Japan, which was once noted for its advanced feature phones catered specifically for a Japanese audience—one of the industries the so-called ‘Galapagos Syndrome’ typically refers to. Below is a graphic that shows, in the upper right hand corner, just a sampling of the QR code payment options currently available in Japan. Cash and convenience store payments (Konbini) are the second most used payment method, totaling 18% of transactions. It’s as simple as that, and the ad is incredibly straightforward with the benefit for its intended audience. The tourism boom we are currently experiencing in Japan began in earnest in 2012. Convenience stores have also become popular locations for paying utility bills. When it comes to preferred payment methods, credit and debit cards are the payment methods of choice, with 71% of transactions. 7-Eleven, the number one convenience store chain in Japan, in particular, was a major contributor in making this possible via their ATMs, which were updated to accept a wide variety of foreign-issued cards. Japan is no stranger to innovative payment … This is actually an important distinction to make here, because it is not as if the Japanese didn’t have credit cards until recently. The Abe administration has set a goal of a 40% cashless rate by 2025. While cashless payments in Japan are gaining ground among consumers, a number of obstacles still stand in the way of greater adoption. See More. Since it's a cash-based payment method, it does not involve any kind of credit card data to be entered/handled, it only accepts cash money to be paid by the shopper. Cash and convenience store payments (Konbini) are the second most used payment method, totaling 18% of transactions. While bank wire transfers, convenience store payment, and even cash on delivery (COD) are used more frequently than one might expect for online shopping, ecommerce has still played a significant role in furthering regular usage of credit cards among the Japanese. With the rapidly graying population to contend with, there are significant demographic hurdles for QR code payments to overcome in Japan. Compare that with QR codes which require opening an app, showing the clerk, and having them scan the QR code—or vice versa; It’s just not as big of an innovation given Japan’s existing cashless payment solutions. For example, Seven-Eleven provides a service called “Seven Bank”, which lets you withdraw money if you have an international cash card with “International” written on it. Thus it should not come as a surprise that given the current environment and the opportunity that cashless payments market represents, banks, credit card companies, and payment processor terminals have begun heavily advertising and promoting various non-cash solutions. They’ll not be winning any Cannes Lions or Golden Pencils for this effort, but the overall media strategy is solid—we have seen the campaign in various mediums and on a number of different platforms—and the OOH placements, especially the billboard at the Shibuya scramble crossing, have been excellently chosen. In 2019, there were over 56 thousand convenience stores operating in Japan. It wasn’t until more recently, with the combination of smartphones and transit smart cards, that another significant turning point for cashless payments occurred. Looking back at the Japanese market over the past ten years, a number of factors, building up slowly over time, have helped contribute to the current landscape concerning cashless payments. These include the growth of ecommerce, the proliferation of smartphones, and the rise in inbound tourism. But even more than a rebate, what could steer more people away from cash is something we all experience on a recurring basis: bills. Konbini, which means “convenience store” in Japanese, is a local cash-based payment method in Japan. You can even print out photographs if you bring the digital photo d… The Japanese convenience store market is almost totally dominated by FamilyMart, Seven-Eleven Japan and Lawson. mobile payments), new contenders into the market are appearing one after another and Japanese consumers now find themselves with an abundance of methods by which they can make their purchases. As mentioned in the beginning of this article, cashless payments encompass not only newer mobile payment apps utilizing QR codes, but also the more familiar cashless options: plastic credit and debit cards.