Japan is making progress towards becoming a cashless society, with the share of cash in total payments set to decline from 76.2% in 2018 to 71.4% in 2022, says GlobalData, a leading data and analytics company.
GlobalData’s latest report, Payments Landscape in Japan: Opportunities and Risks to 2022, reveals that the country’s total card payments value increased from JPY47.0 trillion (US$428.1bn) in 2014 to JPY64.5 trillion (US$587.6bn) in 2018 and is expected to reach JPY82.6 trillion (US$752.6bn) in 2022.
Nikhil Reddy, Payments Analyst at GlobalData, explains: “While cash continues to dominate overall payments, it is being gradually displaced with a growing preference for electronic payments. Expanding payment infrastructure, rising card acceptance among SMEs, and the government’s focus on non-cash transactions are expected to support the growth of the payment cards market.”
The Japanese government has been playing a key role in the promotion of electronic payments. In this regard, it released its ‘Cashless Vision’ in April 2018, with the aim of achieving a cashless payment ratio of at least 40% by 2025. It intends to reach its target through initiatives such as the standardization of QR-code payments and cashless payments at self-service kiosks.
The upcoming 2020 Olympic and Paralympic Games in Tokyo are expected to provide an impetus to the country’s payments market, as all major banks and payment companies are making their payment infrastructures compatible with foreign-issued payment cards.
Many ATMs are also being installed at locations with high footfalls, such as tourist attractions and supermarkets. Restaurants, souvenir shops and popular tourist spots are gradually embracing point-of-sale (POS) terminals. Retail chain Aeon also announced plans to install 100,000 contactless POS terminals by 2020.
In addition, the market is witnessing new developments encompassing payment card security and convenient payment solutions. Card issuers and payment companies are increasingly leveraging advanced technologies such as blockchain, contactless and biometrics.
Reddy concludes: “Rising card acceptance, coupled with the emergence of new technologies, will further push the use of electronic payments in the country.”