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Preferred Payment Methods in Japan

Main card schemes and alternative payment methods in Japan

Read below about payment methods And how to increase conversion by offering the most convenient online payment methods when selling goods online in Japan

This overview was first published in ‘Japan – Cross-border eCommerce Report’, an eBook produced in association with our partner Komoju by Degica. Download your free copy of the eBook below to gain access to a comprehensive analysis of the insights that matter most when measuring the size and type of opportunities in the ecommerce market in Japan. 

Payment Methods and Instruments Breakdown

Source: Japan – Cross-border eCommerce Report, Komoju by Degica and The Paypers

Mobile Payments in Japan 

Mobile payments have been rapidly adopted among consumers, resulting in billions of dollars in transactions. The main technologies that enable mobile payments methods are NFC and QR code-based. It is particularly convenient for young digital-savvy generations to pay with their smartphones, either via a payment app or by scanning a QR code. In a bid to increase customer loyalty and satisfaction, PayPay, Line Pay and MerPay, which are the most popular QR code payments brands, offer various rewards to their users based on the transactions they make. 

Alternative Local Payment Methods 

JCB is a Japan-based card network that offers international credit card offerings. JCB is the most popular local brand, with more than 130 million customers in 23 countries. 

Konbini, which means ‘convenience store’ in Japanese, is a local cash-based payment method, which provides consumers with the option of ordering products and services online and paying for them at a convenience store. There are 55,000 locations where this payment method is accepted, including 7-eleven, Lawson, and FamiliyMart – the three chains that own the lion’s share of the market – as well as MiniStop, Seicomart, and DailyYamazaki. 

PayPay is the most popular e-wallet that allows customers to pay by scanning a QR code with their smartphone. It’s also a prepaid-based payment method, which means that the user can top-up their money from their debit and credit card or from their bank account into the e-wallet. PayPay has approximately 47 million users in Japan and is accepted at 3.5 million locations across the country. 

LINE Pay is a mobile payment service part of the popular Japanese messaging service LINE. Customers can link their credit or debit cards to the e-wallet and shop at LINE STORE or other online merchants that accept LINE Pay. The payment method is available at 400 million shops across Japan and currently has more than 39 million users in Japan, and more than 56 million users across its four main markets: Japan, Taiwan, Thailand and Indonesia. 

Rakuten Pay (Online) is a digital wallet developed by Rakuten. Consumers can link their credit cards to the e-wallet and pay both online or in-store by using Rakuten points, Rakuten Cash. 

MerPay is developed by Mercari, a Japanese marketplace for secondhand goods, and it’s a mobile wallet via which users can link their bank accounts. Consumers can use this payment method at Mercari, but other online stores accept MerPay, as well as convenience stores, restaurants, drug stores, and other stores across Japan. Based on the Mercari database, there are over 12 million active users of MerPay - most of them use money from sales on Mercari for purchases online. 

Pay-Easy is a service that allows consumers to pay for online shopping and taxes from their computer, smartphone, or ATM without having to line up at a financial institution window or convenience store cashier. 

Paidy is a popular BNPL payment method in Japan that has been rapidly growing in recent years. It is accepted by more than 700,000 ecommerce sites including Amazon, Qoo10 and Apple, and has a user base of more than 55 million users. It is called ‘the first Japanese unicorn startup’ by its user base and sales. 

AuPay is a carrier billing app that compiles other two payment services for consumers’ use: au PAY, au PAY Prepaid Card, and auPAY Credit Card. This payment method is developed by KDDI, a Japanese telecom corporation. It is available at 4.53 million shops across Japan and used by 27.5 million users. 

D-Barai, the online and in-store e-wallet from Docomo, allows users to make purchases both online and in store. A D-Barai account is linked to Docomo’s points. Users are awarded points for using the card when shopping. These points can then be credited towards shopping or put on a Docomo account. 

Docomo is one of the biggest Mobile  at also facilitates different cashless payment services. It is used by more than 25 million users and is accepted by 2.2 million merchants. 

Suica, which stands for the ‘Super Urban Intelligent Card’ is a prepaid card primarily used for transportation, but it’s also accepted at grocery stores, restaurants, and vending machines. There are a lot of ‘pay-as-you-go’ options for transport in Japan called IC cards, such as Pasmo, Icoca, Pitapa to name a few, but Suica is the most popular one in this field, with 10 million active users.