Card payments in Japan are set to rise by 9.5% in 2021 supported by improving economic conditions, rising consumer spending and the upcoming international sports events, forecasts GlobalData, a leading data and analytics company.

According to GlobalData’s Payment Cards Analytics, with the reopening of the economy, government measures to encourage electronic payments, easing of travel restrictions, and the upcoming Tokyo Olympics, card payments are set to register a compound annual growth rate (CAGR) of 8.3% between 2020 and 2024 to reach JPY110.2 trillion (US$1.1 trillion) in 2024.

To stimulate consumption following the economic impact of the COVID-19 pandemic and drive digital payments, the Japanese government has launched a reward program called ‘My Na Point’ in September 2020 which ended in March 2021. It offered consumers reward points worth up to JPY5,000 (US$48.4) on their purchases made using digital payments such as debit card, credit card and prepaid card.

Kartik Challa, Banking and Payments Senior Analyst at GlobalData, says: “The upcoming Olympics and Paralympics slated for July and August 2021, respectively, are expected to provide an impetus to the country’s payments industry.”

All the country’s major banks and payment participants are making their payment infrastructure compatible with foreign-issued cards and installing POS terminals at locations with high footfall, such as tourist attractions and supermarkets.

In addition, card issuers are working to push contactless adoption to encourage consumers to shift away from cash. For instance, AEON Card, in collaboration Visa, plans to roll out around 10 million contactless cards by the end of 2021 and enable contactless feature in 100,000 cash registers across 16,700 stores including AEON, AEON MALL, Maruetsu, Welcia, and My Basket.

Mr Challa concludes: “While the Japan’s payment landscape has traditionally been dominated by cash, government initiatives to promote electronic payments and an improving payment infrastructure will drive the growth of the payment card market.”