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An expert analysis of the cards, payments and consumer banking market in Japan, with insightful commentary supported by appropriate data. Cash usage remains unusually high for such an advanced market, leaving a lot of transactions to be migrated to digital.
The unified QR-code system helps as do the interbank-transfer reforms underway, with fees reduced for the first time in four decades. Fintechs are proliferating in Japan, especially in partnerships, but are not yet in a position to challenge entrenched incumbents.
The Japanese government, recognising that the country lags behind its neighbours, is pushing for cashless payments. It is a strategic goal that has benefitted from pandemic-driven changes to consumer behaviour and the banking industry's focus on digitalisation. Fintechs, albeit slowly, are being brought into the Japan payments clearing system.
For such an advanced market, there are plenty of cash transactions to be migrated to digital. Some 38 per cent of the value of consumer transactions in 2022 were undertaken using cash. Healthy growth can be expected too when it comes to mobile payments with only a quarter of adults using this means of payment during 2022. The new QR standard should play a key role in this regard.
Both at the point of sale and online, credit cards in Japan remain the most popular non-cash payment tool, with Visa leading JCB for credit cards in circulation and Mastercard investing in market visibility. Adyen and Worldline are now providing acquiring and processing services here.
Convenience is popular, with Japan's issuers and fintechs producing a host of solutions, but delays to interbank access for non-establishment players mean that digital solutions have yet to do the kind of heavy lifting that is becoming common in other markets throughout the region.
This report provides a detailed analysis of current market trends in Japan's cards and payments market with valuable insights into emerging trends. It gives an expert analysis of the payment markets operating in Japan and offers detailed intelligence on cards in circulation, key issuers' market share, transaction numbers and billed volumes.
Our experts cover the contemporary financial and regulatory landscape for the banking, acquiring and processing operations in Japan and deliver intelligent insights into the marketing strategies used for cards and payments. It includes coverage of the relevant regulations governing the country's financial and banking markets.
TABLE OF CONTENTS
Demographics and the economy
Key retail banks and issuers
Acquiring and processing
Regulatory and other cards market information
Japan Country Report Data Tables
(All 2016-25F unless otherwise stated)
1: Demographic and economic indicators
2: Ownership of key consumer devices
3: Internet usage by population
4: Access points 2016-23E
5: Account penetration
6: Consumer payment 2016-23E
7: B2C e-commerce payment methods 2016-23E
8: Total cards payment metrics
9: Contactless cards metrics 2018-25F
10: Credit card numbers
11: Total credit cards metrics
12: Credit cards profitability indicators
13: Debit cards numbers
14: Debit cards metrics
15: Prepaid/e-money cards metrics
16: Mobile proximity payment metrics: 2017-25F
17: Japan market profit pool including credit card numbers, billed volumes, outstandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).
(All 2016-23F below unless otherwise stated)
18: Networks' credit card market shares
19: Networks' credit card numbers
20: Networks' credit card billed volume
21: Networks' number of credit card transactions
22: Networks' average credit card transaction value
23: Credit card interchange fees by network
24: Networks' debit card market shares
25: Networks' debit card numbers
26: Networks' debit card billed volume
27: Networks' number of debit card transactions
28: Networks' average debit card transaction value
29: Key credit card issuers market shares by credit card numbers 2018-23F
30: Key issuers market shares in credit card outstandings 2018-23F
31: Key debit card issuers market shares by debit card numbers 2018-23F
32: Merchant acquirer credit card market share 2022E
33: Credit card merchant service charges
34: Merchant acquirer debit card market share: 2022E
35: Debit card merchant service charges
36: Credit card issuer/issuing processor relationships
37: Credit card acquirer/acquiring processor relationships
38: Credit card issuing processor market shares by card numbers 2022E
39: Credit card acquiring processor market shares by the number of POS transactions 2022E
40: Online merchant acquirer market share 2022E
Given that Japan is such a technologically advanced society, it is surprising that consumers have been slow to adopt card usage. However, older cohorts are attached to the ritualistic culture surrounding payments.
Whilst cash continues to be a preferred payment mode in Japan, in particular for lower-value purchases, its share is beginning to erode. Alternative cashless payment methods have begun to make more substantial inroads, propelled by hygiene concerns in particular.
Japan has been at the forefront of payment technologies, inventing QR codes in 1994 and also pioneering mobile wallets technology and integrated circuit (ie, chip) cards. That may come as a surprise as, when it comes to payments, Japan continues to be a cash-loving country despite its digital prowess.
The Japanese payment card market is mature, with credit cards in use for approximately half a century. Around 301 million credit cards were in circulation as of the end of 2022, producing a credit card penetration rate of 272 credit cards per 100 adults.
The market for credit cards remains primarily split between Visa, Mastercard and JCB, which together had a combined market share of 98% in terms of card numbers in 2022. Total billed volume grew by 59% between 2016 and 2022.
Key Retail Banks and Issuers
Despite the weak yen, operating costs in Japan are among the highest in the world, and it is difficult to compete against the country's traditional domestic banks, which have deeper roots and higher capital bases.
Acquiring and Processing
The merchant-acquiring market in Japan is highly competitive, with all the major issuers involved ... Japan, primarily an in-house card processing market, is tough to penetrate for third-party processors.
The size of the B2C e-commerce market has been expanding steadily, growing from $115 billion in 2016 to $172 billion in 2022, the majority of which is retail based, followed by services and then digital content.
Regulatory and Markets Information
The country's Banking Act regulates the banking business, covering acceptance of deposits, lending of funds and processing of exchange transactions. As well as the Banking Act, the Payment Services Act is enforced by the FSA.
More than 160 entities are referenced in this market report for Japan
2020 Tokyo Olympics
2025 World Exposition
All Nippon Airways
Bank of America Merrill Lynch
Bank of Nova Scotia
BOJ-NET Funds Transfer System
Central Finance Company
Council of Anti-Phishing Japan
Credit and Finance Information System
Dai Nippon Printing
East Japan Railway Company
Financial Services Agency
Foreign Exchange Yen Clearing System
Fukuoka SoftBank Hawks
GMO Payment Gateway
Japan Card Network
Japan Consumer Credit Association
Japan Credit Bureau
Japan Debit Card Promotion Association
Japan Electronic Payment Promotion Organisation
Japan Net Bank
Japan Post Bank
Japan STO Association
Japanese Bankers Association
Japanese Credit Bureau
Japanese Fair Trade Commission
Japanese Virtual Currency Exchange Association
Kisetsu Saison Finance India
Strategic Development and Management Bureau
Mitsubishi UFJ Financial Group
Mitsubishi UFJ NICOS
Osaka Credit Bureau
Payments Japan Association
Rakuten Fintech Vietnam
Rizal Commercial Banking Corporation
Rugby World Cup
SBI Motor Japan
Seven Card Service
SMBC Finance Service
SMBC Trust Bank
Sony Payment Services
Sumishin SBI Net Bank
Sumitomo Mitsui Card Company
Sumitomo Mitsui Financial Group
Sumitomo Mitsui Trust Bank
Tama Shinkin Bank
Tokyo Star Bank
TS CUBIC Pay
Universal Studios Japan
Visa Japan Association
Wako Tea Salon
Yosakoi Soran Festival
Argus Advisory Research reports delivering invaluable market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit. Analysts and researchers use both primary and secondary source data and conduct in-depth interviews with senior industry executives and local experts.
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