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Cashless Payments in Japan

For years, Japan was primarily a cash economy. People preferred physical banknotes over cashless transactions.

In fact, back in 2021 cashless payments were just 15.1% of total transactions and only rising slowly1. Comparatively, in the UK this statistic was 27% in the same year2. However, this all changed when the COVID-19 pandemic hit. In as little as one year passing, the cashless payment ratio reached 32.5% in 2022 and it continues to rise in payment favourability3. Of the methods involved, E-money & QR code payments have seen substantial growth over the past few years in Japan.

But what are Japan’s most popular cashless payment methods? Why have QR codes become so popular? Is this meteoric rise of cashless payments here to stay? Should businesses include multiple cashless payment methods in their stack? In this blog, we explore the answers to these questions to help you to better understand the state of cashless payments in the country.

Japan’s most popular cashless payment methods4

Credit card
The most popular cashless payment method in the world. In Japan, the credit card usage is as high as 77%5. The total amount of sales through credit cards issued by Japanese companies reached 74.4 trillion yen in 20206.

Debit Card
Money is immediately deducted from a user’s bank (savings) account. The total debit card payments in 2020 (including J-Debit as well as branded cards like Visa) reached over 2.2 trillion yen7.

A service that uses electronic data to settle payments online. As cash becomes digitised, there is no longer a need for manual (offline) transactions. Electronic money can be used for:

  • prepaid payments – this requires the user to top up a mobile app or card prior to the transaction.
  • postpaid payments – the user is charged at a later time.

Recently, prepaid travel cards like Suica (used by 58%8 of commuters), or QR code payment services like PayPay (54%9 penetration rate) have gained popularity. Over half of the Japanese population uses e-money, and this number is predicted to increase. In 2020, the total value of code payments (including barcode payments) reached over 4.2 trillion yen10.

The 4 main types of e-money11

  • Transportation IC (Integrated Circuit) cards like Suica or ICOCA can be used to pay for transportation, like buses and trains, as well as for purchasing goods at vending machines or shops.
  • Prepaid Cards Cards such as nanaco or Rakuten Edy allow customers to pay electronically at supermarkets or convenience stores.
  • Credit Cards This type of payment works by linking a credit card to an electronic money system, which eliminates the need to charge it prior to making payments.
  • QR Codes Payments are completed via smartphone, by linking a mobile app account with a credit card.

The 3 main types of postpaid payments

  • Direct carrier billing This allows users to purchase digital content and products through their mobile phone carrier using a code.
  • Web ‘konbini’ (convenience store) payments This allows customers to order goods and services online and pay for them over the counter with cash at major convenience stores nationwide.
  • ‘NP Atobarai” (Net Protections post-payment) Delayed payments at places like convenience stores, banks and post offices.

How cashless payments options can affect sales

According to a 2020 survey12 on e-commerce payment methods, credit card payment rates have decreased while e-money payment methods (like PayPay) have increased when compared to data from 2018. But does it really matter which forms of payment a business offers and should they offer the customer more than one option? This survey aimed to answer these questions.

Participants were asked about their preferred payment method for purchasing goods on e-commerce sites:

Both men and women pointed to credit card payments as their preferred method, followed by convenience store payments. In terms of age groups, credit card payments were used by less than 40% of teens, while other methods like convenience store, direct carrier billing, PayPay (online) payments, as well as cash on delivery were as high as 45%. For men in their 20s and 30s, convenience store, direct carrier billing, PayPay, and cash on delivery exceeded 20%. These results show that it is important for e-commerce sites to provide various payment methods.

Respondents were also asked what they would do if it was not possible to pay with their preferred method online. The majority of respondents– 60% of both men and women shopping for physical products, and 70% of men and 60% of women shopping for digital content– said they would leave the site without purchasing anything.

These results indicate that including customers’ preferred payment method may be that final ‘push’ that can make or break a sale. In addition to offering attractive products and services, businesses should prioritize providing popular payment methods, as this will lead to more conversions and sales.


Amidst the pandemic, demand for e-commerce and cashless payments in Japan continues to grow as more people choose to buy online rather than offline. The data shows that it has become an integral part of any modern successful business in Japan. The final question for any modern nation is whether its economy will ever become fully digital. In Japan, this is still unclear but it is certainly looking more likely by the year.

You can download a more detailed White Paper on Cashless in Japan here.

DMFA provides support for unique Japanese payment services. Make sure to reach out to learn more about available options, as well as our digital marketing services.

  1. Cashless payments in Japan – statistics & facts | Statista
  2.  Contactless now accounts for more than a quarter of all UK payments | Insights | UK Finance
  3.  Cashless payments in Japan – statistics & facts | Statista
  5. インフキュリオン、「決済動向2021年4月調査」
  8. インフキュリオン、「決済動向2021年4月調査」
  9.  インフキュリオン、「決済動向2021年4月調査」
  12. SBペイメントサービス株式会社
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