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A comprehensive overview of the cards, payments and consumer banking market in Japan, with clearsighted commentary backed by detailed market data.
The pandemic is expected to cause a sharp recession, wiping out recent economic progress but also presenting an opportunity to accelerate the uptake of cashless methods.
In addition, MSC caps and cashback schemes may incentivise merchants and consumers to make the switch. QR codes, once a footnote in Japanese tech history, are coming to the fore in payments having revolutionised payments in China.
New regulations require non-card issuing acquirers to apply for a licence to operate. Network-branded debit cards are slowly gaining ground.
How the government has been improving payments infrastructure.
Which online bank has proved the most attractive and why.
What the implications are of homegrown standard FeliCa.
Why QR codes' appeal has seen a resurgence for providers.
How long-cherished payments rituals reassure consumers.
TABLE OF CONTENTS
Demographics and the economy
Payments environment
Japanese cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information
Appendices: Card Payments Data
Appendix I: Demographics and the economy
Appendix II: Payments environment
Appendix III: Cards market data
Appendix IV: Mobile payments data
Appendix V: Profit pool
Appendix VI: Card networks
Appendix VII: Key retail banks and issuers
Appendix VIII: Acquirers and processing
Appendix IX: Online acquiring data
Demographics and Economy
The total labour force of Japan came to an estimated 62% of the total population at the end of 2019, with a median income of $35,500 and an unemployment rate of just 2.4%.
Payments Environment
Consumers have been slow to adopt card usage due to a hard-to-break preference for cash. However, debit cards are now held by approximately 88% of adults, while 70% of adults hold a credit card.
Cards Market
Cash continues to be a preferred payment mode in Japan, in particular for lower-value purchases. The low crime rate also impacts the preference for cash over cards as consumers feel safe carrying cash, whereas they remain fearful of the counterfeiting of cards and potential data breaches.
Mobile Payments
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 is now notable as a cash-heavy country despite its digital prowess.
Profit Pool
The Japanese payment cards market is mature. Around 284 million credit cards are in circulation as of the end of 2019, producing a credit card penetration rate of 258 credit cards per 100 adults.
Card Networks
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 2019. The development of debit cards in Japan lags behind that of credit cards.
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. With retailers operating multiple terminals to facilitate on-us transactions, the majority of domestic transactions are on-us: hence interchange rarely applies.
Online Acquiring
The size of the B2C e-commerce market has been expanding steadily, growing from $102 billion in 2013 to $178 billion in 2019, the majority of which is retail-based, followed by services and lastly digital content.
Regulatory and Markets Information
Local and foreign firms carrying out banking business are required to obtain a banking licence. In addition, banks are required to obtain a separate licence from the FSA for providing securities-related services in Japan.
2Checkout
7-Eleven
7pay
Aeon Bank
AEON Group
Aozora Bank
AIFUL Corporation
All Nippon Airways
AlliedWallet
Amazon
Amazon Pay
ANA
Android Pay
Aozora Card,
Apple Pay
Bank Mizuho
Bank of America
Bank of China
Bank of Nova Scotia
Bank of Tokyo-Mitsubishi UFJ
Bank Pay
bitFlyer
Bitpay
BMW
Branché
Bundle
CAFIS
CARDNET
Cardstream
Cathay Pacific
Cedyna
Cedyna Financial Corporation
Central Finance Company
Citi Cards Japan
Citibank Japan
Coiney
Costco
Credit Saison
CyberSource
Dai Nippon Printing
Daiwa Securities Group
Daon
Delta
Denso Wave
Diners Club
DNP
DOCOMO
East Japan Railway Company
eBank Corporation
E-Saifu
Family Mart
FeliCa
Credit and Finance Information System
Financial Services Agency
FSA
Fujitsu
Fukuoka SoftBank Hawks
Garmin Pay
General Electric Group
Ginza Lounge
Glassdoor
Global Payments
GMO Epsilon
GMO Payment Gateway
GoCoin
Golf Digest
Google Pay
GP Net
GP Network
Grab
Honda Motors
HSBC
IDEMIA
Indeed.com
Ingenico ePayments
J/Speedy
JACCS Card
JAL
Japan Airlines
Japan Card Network
Japan Credit Bureau
Japan Debit Card Promotion Association
Japan Electronic Payment Promotion Organisation
Japan Net Bank
Japan Post Bank
Japanese Credit Bureau
JCB
J-Coin
J-Coin Pay
J-Debit
JEPPO
JR East
KDDI
Kidzania Koshien
KidZania Tokyo
Korean Air
Kyash
Lawson
Life Card Co.
LINE
LINE Pay
Lloyds TSB
Manepa
Mastercard
McDonald's
Miraino Debit
Mitsubishi UFJ Financial Group
Mitsubishi UFJ NICOS
Mizuho Bank
MMD Lab
Mobile Suica
MtGox
MUFG
MUFG Coin
MUFG Wallet
My Wallet
Nanaco
Naomi Osaka
NeoMobile Securities
New Otani
Nippon Pay
NTT
NTT Data Corporation
NTT DoCoMo
Olympic Games
OMC Card
Orico
Orient Corporation
Osaka Credit Bureau
PayGent
PayPay
Paytm
Persona STACIA
PGA Tour Champions
PRESTIA
Qubitous
QUICPay
QUOQ
Rakuten Bank
Rakuten Edy
Rakuten Pay
Recruit Group
Ripple
Rugby World Cup
S&P
Sakura Card Company
SBI Holdings
SBJ Bank
Seven & I Holdings
Seven Bank
Shinsei
Sky Traveler
Smartpay
SMBC Trust Bank
SMFG
Société Générale
Soft Space
Softbank
SoftBank Mobile
Sony
Sony Bank
Sony Payment Services
Square
Starbucks
Starwood Preferred Guest
Stripe
Suica
Sumishin SBI Net Ban
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Card Company
Sumitomo Mitsui Finance & Leasing
Sumitomo Mitsui Financial Group
Sumitomo Mitsui Trust Bank
Suruga Bank
Tap on Mobile
Tohoku Rakuten Golden Eagles
Tokyo Star Bank
Toppan Printing
Toyota Finance
TSYS
UBS Securities
UC Card
UnionPay
United
Universal Studios Japan
Verifone
Visa
VisaNet
V-Preca
Wako Tea Salon
WAON
WorldPay
XRP
Yahoo
Yahoo Japan
Yosakoi Soran Festival
Zengin
Reports include detailed market and competitor intelligence on payments cards, e-money, acquiring, retail banking, and consumer credit in the Asia Pacific region. Analysts use primary and secondary source data and conduct in-depth interviews with senior industry executives and finance experts.
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