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The Cards and Payments Industry in Japan: Emerging Trends and Opportunities to 2020

  • December 2016
  • 48 pages
  • GlobalData
Report ID: 3755025

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The Cards and Payments Industry in Japan: Emerging Trends and Opportunities to 2020

Summary

Japan’s economy went through a crisis during the review period (2012-2016) as a result of a growing elderly population, a contracting workforce and declining exports. The government expects the economy to recover with rises in consumer spending and capital investment over the forecast period (2016-2020). Japan’s payment landscape continues to be dominated by cash, which accounted for 79.7% of the overall payment volume in 2016. With government initiatives to promote electronic transactions, the upcoming Olympic Games, the adoption of technology such as EMV and NFC, and improved banking infrastructure to accept of foreign-issued cards, payment cards gained prominence during the review period.

Credit cards are popular among Japanese consumers, due to the rewards they offer and their high level of acceptance. Credit cards remained the largest in the Japanese payment cards market, accounting for 84.3% of the overall transaction value in 2016. The number of credit card transactions rose from 6.9 Billion in 2012 to 9.6 Billion in 2016.

Most convenience and department stores in Japan do not accept debit card payments, as the long settlement process for debit card transactions make them unattractive to merchants. In-store payments are settled on the customers’ accounts the next day, while merchants’ accounts are credited after two or three days. Further, many ATMs cannot be used for cash withdrawals at specific times during the night.

The upcoming 2020 Olympic and Paralympic Games are expected to provide impetus to the country’s cards and payments industry. To supplement these global events, the Japanese government has appealed for banks and card issuers to make ATMs compatible with foreign-issued payment cards. Japan Post Bank, Seven Bank, Mitsui Banking, Mitsubishi UFJ, Mizuho Bank and E-net Japan Corporation have installed ATMs that accept foreign-issued cards.

The report "The Cards and Payments Industry in Japan: Emerging Trends and Opportunities to 2020" provides top-level market analysis, information and insights into the Japanese cards and payments industry.

In depth, this report provides the following -
- Current and forecast values for each market in the Japanese cards and payments industry, including debit and credit cards.
- Detailed insights into payment instruments including credit transfers, checks, cash and payment cards. It also, includes an overview of the country’s key alternative payment instruments.
- E-commerce market analysis and payment methods.
- Analysis of various market drivers and regulations governing the Japanese cards and payments industry.
- Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards.

Companies mentioned in this report: Japan Post Bank, Sumitomo Mitsui Financial Group, Mizuho Financial Group, Mitsubishi UFJ Financial Group, Resona Holdings, Credit Saison, Rakuten, Toyota, Aeon credit service, Visa, Mastercard, JCB, American Express, J-Debit.

Scope

- The Japanese government undertook a number of initiatives to encourage electronic payments during the review period. As part of its Regional Revitalization policy launched in June 2014, the government urged banks to upgrade domestic ATMs to make them compatible with overseas-issued cards, due to a rise in inbound tourists. In January 2016, the Ministry of Economy, Trade and Industry announced plans to launch a mobile payment (m-payment) app for foreign visitors. Consumers register passport and credit card details in the app, and make payments at retail outlets using mobile phones.
- Japan Post Bank, Seven Bank, Mitsui Banking, Mitsubishi UFJ, Mizuho Bank and E-net Japan Corporation have installed ATMs that accept foreign-issued payment cards. All of Seven Bank’s ATMs - primarily located in 7-Eleven stores - now accept foreign cards. The company, which has 23,000 ATMs, plans to expand the network by 2,000 by 2018. Japan Post Bank also plans to install 3,500 ATMs by 2018.
- The government aims to welcome 40 million tourists a year by 2020, as a total of 25.4 million tourists visited Japan in 2016. To help intentional tourists, the government abolished tax for foreign travelers on confectionery, cosmetics, food, alcohol and medicinal items from October 2014. According to the new law, tourists spending US$42.7 (JPY5,000) or above at specified merchants are eligible for tax exemptions from bills.

Reasons to buy

- Make strategic business decisions, using top-level historic and forecast market data, related to the Japanese cards and payments industry and each market within it.
- Understand the key market trends and growth opportunities in the Japanese cards and payments industry.
- Assess the competitive dynamics in the Japanese cards and payments industry.
- Gain insights into marketing strategies used for various card types in Japan.
- Gain insights into key regulations governing the Japanese cards and payments industry.

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