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. Two of the more prominent players in the QR code payment app market in Japan are PayPay and LINE Pay. The company I work for is currently using Digital River to render a separate Japanese shopping cart on our e-commerce site. After watching the commercials, the campaign poster (below) imploring people to “Have a good cashless,” is infinitely preferable. Your idea has been submitted a while ago but unfortunately hasn't gathered enough kudos (50 per year). Efforts to encourage further adoption of cashless payment from the government so far do not seem likely to yield results on their own, and tie ups with failed campaigns such as the often criticized “Premium Friday” (an attempt to get businesses to let workers go home early one Friday a month), simply highlight the government’s lack of ability to influence behavior without any real legislation. 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. 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. 1. Japan, or LINE, may be the only ones left in the QR code payments space once the dust settles. When it comes to cards, non-liability statements in terms and agreements, can make this argument more flawed than card issuers would have you imagine. PayPay is a QR code based mobile payments app operated by PayPay Corporation, a joint venture from Softbank, Yahoo! While the cashless payment rate in the country is still low by global standards, there has been a marked increase in the number of stores and retailers accepting various types of non-cash payments—a big departure from even just a few years ago—and this is having a significant impact on the consumer experience in Japan. The first ad in the series (shown below) was deemed by Japanese netizens to be particularly lacking in taste. Alternative payment methods used by Japanese shoppers include: As of September 2011, over 70 million Japanese JCB cardholders were generating 9,600 billion yen in transactions annually. Although mobile payment apps are used more frequently than debit cards, their usage is still dwarfed by cash, credit, and eMoney/transit smart cards. See More. Furthermore, due to there being so many competing systems all vying for market share, QR code mobile payment apps are not universally accepted. But even more than a rebate, what could steer more people away from cash is something we all experience on a recurring basis: bills. However, if consumer demand for cashless payments continues to grow, more businesses, especially small businesses, may need to acquiesce and start accepting non-cash payments, whether it be credit and debit cards or mobile apps and QR code payments. 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. One of the main drawbacks facing QR code payments is the need to pre-charge money. While there are various occasions and settings where people might Read more…, One of the major changes in Japan brought about by the coronavirus pandemic has been the number of Japanese companies instituting work from home (WFH) policies and allowing telework or remote work. However, they are increasingly NOT free and often incur fees of a few hundred yen per paper or statement. There are various type of payment app, but today, we introduce you 3 major app that is used in Japan,-nanaco mobile. Convenience stores also offer a wide range of services, many of which can be accessed through automated multi-purpose terminals: Multi-purpose terminals: Tickets for sport events, concerts, theme parks, highway buses and other travel services can be purchased at the multi-purpose terminal which often also serve as copy machine and fax. Japan is also familiar and comfortable with mobile payments. Not to mention, when shopping on some sites, such as Amazon Japan, you can even ship to a specified convenience store (usually one near your home) and at the store use a touchscreen kiosk to print out a paper slip with a barcode that allows you to pay at the register and receive your packages. Let’s take a look at the mobile payment landscape in Japan and the key players that are changing Japan’s obsolete mobile payment system. Almost any kind of daily commodity can be found here, and convenience stores that can handle 24-hour-a-day ticket sales and reservations as well as payment processing have become indispensable. 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. Japanese shoppers have spent $1.8B in purchasing products from businesses located in the US and China. NFC Mobile Payment with more globalization Since 2016, Apple Pay and Android PayTM have been also available for use in Japan, by taking advantage of the NFC(Near Field Communication ) standard and other international standards. 71% card based 18% cash based / convenience store payment Other payments methods, including Direct Debit, amount to only 11% of the total number of transactions. With this dramatic increase in the number of tourists to Japan, which according to the Japanese National Tourism Organization (JNTO) surpassed 31 million visitors in 2018, there was a subsequent need to improve payment infrastructure to accept foreign cards both at ATMs and in stores—as many tourists preferred to use their debit and credit cards like they could in their own countries. But even when it comes to credit cards, while online shopping definitely has helped noticeably increase their usage, a multitude of payment options for online shopping are still accepted in Japan. Other payment methods, including Direct Debit, amount to only 11% of the total number of transactions. The one aspect of this campaign that was on-target, however, is the outdoor ads. Convenience stores, often shortened to konbini among Japanese, make up an integral part of the country’s retail sector. If you wish to change your payment method to cash, simply select the option in your online account. 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. * Payment is accepted by cash only and limited to ¥300,000 per transaction. Merchants selling to shoppers in the US and China have exported products amounting to roughly $1.4B and $0.5B respectively. After cash, bank wire transfer is often the preferred method for many Japanese businesses, as the fees to make such a transfer are borne by the customer or the person making the payment. The Japanese convenience store market is almost totally dominated by FamilyMart, Seven-Eleven Japan and Lawson. 2Checkout opens up the primarily cash-based Japanese culture to international merchants, enabling you to easily accept Konbini and Pay-easy payments and expand your business in the area. Why is Japan lagging behind so much in this regard, compared to other countries? Having to spread out one’s money among a number of apps seems silly to many Japanese, when they could just use cash, credit, or transit smart cards. In contrast to the Japanese system, in countries like China a different set of circumstances and lack of infrastructure similar to Japan’s made the rise of QR payment services such as Alipay and WeChat Pay possible. Customers pay by QR code: Cashiers scan the code on a user's mobile device. Ticket reservations made at the ANA Website or ANA by phone. Major convenience store chain Lawson Inc. plans to experiment with leaving stores unmanned late at night and letting customers use a self-service payment system instead as a … While cashless payments in Japan are gaining ground among consumers, a number of obstacles still stand in the way of greater adoption. This is not even a full list and new services are constantly entering the market. The final factor we attribute to the growth of cashless payments in Japan is the rise in inbound tourism. As of right now, Japanese customers have more options than ever to go cashless, but credit cards and transit smart cards (including ones connected to virtual wallets) are proving to be more than sufficient for the overwhelming majority of Japanese. That being said, while merchants and retailers can play an important role when it comes to advancing the cashless payment agenda, at the heart of the matter is actually the simple fact that for Japanese consumers the current system works well and there is no real reason to change. All convenience stores are provided with copy machinesthat can also be used for printing or scanning documents. You can even print out photographs if you bring the digital photo d… With over 25% of all Japanese 2Checkout transactions having been paid with JCB, supporting this payment method is highly important for merchants wanting to penetrate the Japanese eCommerce market. Although these two mobile payment services—along with current number one, Rakuten Pay— are leading the pack, they do not command a convincing lead and QR code payments are still far from mainstream. Discover All The Amazing Services of Japanese Convenience … However, with their respective ecosystems of connected products and services, large corporations and established players, like Rakuten, Softbank, Yahoo! With Suica, for example, one only needs to briefly tap their phone on a card reader for the transaction to occur. Convenience Stores. If I’m not mistaken, the procedure is to go to the office of the company to whom you are making the payment. Japan:Convenience Stores. Convenience Store Payment allows your customers to pay anytime and anywhere in Japan. Cash and convenience store payments (Konbini) are the second most used payment method, totaling 18% of transactions. For example, besides credit or debit, you can pay by bank wire transfer or cash-on-delivery (COD). Please pay by cash. It was so well-received, because who doesn’t like a good cash back deal, that they launched a second campaign (poster below). Japan is no stranger to innovative payment … The first ad (shown below) features Odagiri as a bartender whose idol, fictional singer “David Jaguar,” just happens to enter his establishment. However, despite Japanese cellphones having a precursor to the virtual wallet called osaifu keitai (お財布ケータイ) or ‘cellphone wallet’ years before the first smartphone hit Japanese shores, this method of payment was not widely adopted by the general population—by most accounts it was simply too early for that innovation. Visa and MasterCard are the two most popular card schemes used by Japanese shoppers, followed by JCB, American Express, and other payment methods. In-context checkout for Express PayPal Payments, Mobile Suica - mobile payment system used in Japan's biggest cities, Yahoo! Japan, and an Indian company called Paytm. Gift giving in Japan is important for foreign marketers to understand both in terms of potential opportunities as well as for insight into Japanese consumers. Cash and convenience store payments (Konbini) are the second most used payment method, totaling 18% of transactions. Contact us to find out how we can help you get up to speed regarding the part of the Japanese market that matters to you. This is why the value proposition for QR code payments in the Japanese context is questionable when considering the growing acceptance of credit cards and the already widespread use of transit smart cards. Japan is no stranger to mobile payments either, being one of the first countries to introduce advanced electronic payment methods. A few hundred yen per bill payed out over the course of an entire year, is not exactly insignificant and is enough reason for many to consider not using cash for this purpose. Learn how 2Checkout can help with over 45 payment methods and 100 display and billing currencies. The Japanese did not immediately embrace ecommerce, even at a time when it had become more or less firmly established in western countries. Upon receiving the money Oguri’s character then proceeds to question whom the $20 bill now belongs to, seeing as it’s now in his possession. It allows consumers to order goods and services online, and pay for them over the counter in a convenience store. The nanaco is the payment system from Seven-and-i-holdings which is famous for the convenience stores of Seven-Eleven. The Japanese government has made clear its intentions to promote cashless payments to lessen the costs associated with printing and managing physical currency such as bills and coins. While the previously mentioned factors of ecommerce, smartphones, and tourism have helped to create an environment for non-cash alternatives to begin to be more widely used in Japan, cash is still king. Easy! However, signs of change in this cash-centric society are beginning to show. 3. Japan’s Mobile Payment Landscape in 2019 According to Yano Research Institute Ltd. , the mobile payment market size in Japan is expected to increase from 8 million USD in 2017 to 48 million USD by 2023 (at the rate of 100 JPY = $ 0.8951 USD). 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. Convenience stores have also become popular locations for paying utility bills. Referred to as conbini in Japanese, the main convenience stores in Japan are 7-eleven, FamilyMart, and Lawson, althought here are many more found throughout Japan, especially in the cities. For the longest time, one of the reasons that usage of non-cash payments, traditionally credit and debit cards, lagged behind other countries such as the US was due to fewer merchants accepting them so they could avoid paying processing fees. This event was the launch of Apple Pay in Japan, back in 2017, which turned more Japanese consumers—especially younger, more technically savvy ones—onto the idea of the virtual wallet. But the usage of mobile payment apps among older Japanese is unlikely to increase anytime soon. Source: Sony Corporation . These rebates will be accumulated as “points,” as opposed to cash back, but regardless of what shape this rebate takes, being able to save money despite a hike in the VAT would provide a good incentive for many Japanese consumers to jump on the cashless bandwagon. Unlike in China, where there are basically two players for QR code payments—WeChat Pay and Alipay—in Japan there are numerous companies in the mobile payments space, which has created an incredibly fragmented and complex market. The rest of the ads are all variations of this scenario, and all successfully provide and showcase a valid reason for different kinds of small businesses to offer cashless payment options, in this case credit cards—although the terminal also accepts emoney and QR codes. I never use cash here at 7-11. But to most people it simply came off as a negative ad that brings to mind a schoolyard bully stealing someone’s lunch money. In the commercial a character played by popular Japanese actor, Oguri Shun, asks to borrow a $20 bill from a man in glasses sitting at a bar. The most popular mobile payment methods include smartcard chips and corresponding Java applications that link together mobile credit cards and e-money. It’s as simple as that, and the ad is incredibly straightforward with the benefit for its intended audience. At best its attempt at being philosophical fell flat. Payment at LAWSON, MINISTOP, FamilyMart[Japan Domestic Flights] Obtain a payment slip at a multimedia device in a convenience store, and take it to a cashier within 30 minutes to make your payment. * Payment cannot be made by "Rakuten Edy" in the case of purchasing at a convenience store. Furthermore, while this form of eMoney is more popular among people in their teens than credit cards—which is actually more a reflection of the fact that teens in Japan rarely have credit cards—for all other demographics, credit card is solidly in the number two position after cash. Bill payment — If you live in Japan, you can pay many of your bills at a convenience store! The Abe administration is considering offering rebates of up to 5% for purchases made with cashless payments. Delivery services — No, unfortunately, this does not mean they will deliver their delicious products. Currently, no single mobile payment solution on the market has really made a convincing argument for supremacy among Japanese consumers. When the man in the suit asks, in broken Japanese, if the bar accepts cards Odagiri replies, “We only accept cash.” The group immediately turns around and walks straight to the izakaya right next door which is more than happy to accommodate them. According to CyberSource, 40% of the Japanese population owns a smartphone, and 44% of these users have made … They will, however, allow you to drop off or pick up parcels or even luggage! Unfortunately, most terminals do not have English user … Want to sell worldwide? Simply pay for your SIM card and your first month’s Plan fees by Credit/Debit Card or PayPal account. In the case of Japan, more than the virtual wallet feature of smartphones themselves, it was the compatibility with JR East’s transit smart card/emoney system, Suica, that was the key to gaining more users. Japanese is the official language, with more than 125 million speakers, making localization a key element in the Japanese eCommerce scenery. The question remains Read more…, Media planning is crucial to achieving results with your digital marketing in Japan. 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. In July, Japan's Family Mart convenience store chain will launch a proprietary app-based mobile payment system called Famipay, which will be available at the chain's 17,000 outlets throughout Japan. 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