Japan 2025

Japan 2025 Market Overview
Payment Organisation	Japanese Banks’ Payment Clearing Network (Zengin-Net)- the primary operator of Japan’s domestic interbank payment system established as a subsidiary of the Japanese Bankers Association (JBA).
Domestic Payment Brands	Japan Credit Bureau (JCB); co-branded with Discover, Diners Club, and UnionPay for international use. Zengin System is the mobile A2A payment service in Japan.
Market Structure	Card usage in Japan quite low compared to other East Asian countries at 207.5 card payments per capita in 2023. Evolving Open Banking payment ecosystem
Notable Market Trends	Dominance of credit card in non-cash transactions, Shift towards cashless payments, Lingering relevance of cash payments, Expansion in credit and BNPL options.
Major Card Issuers	SMCC, MUFJ Nicos, Rakuten, Credit Saison.
Major Card Acquirers	JCB, MUFJ Nicos, AEON.
Major Card Processors	JCB, GMO Payment Gateway, Rakuten Payment.

Japan Key Statistics 2023
Population	124.35 billion, with 6.27 bank cards per capita.
Cards	Debit: 466.5 million Credit: 313.6 million E-money: 616.0 million Total: 780.22 billion
Card Payments	Debit: 0.90 billion; value JPY 3.84 trillion ($27.3 billion) Credit: 24.89 billion; value JPY 105.72 trillion ($751.9 billion) Total: 25.80 billion; value JPY 109.56 trillion ($779.2 billion)
ATMs	117,549
ATM Withdrawals	All cards: 6.75 billion; value: JPY 32.87 billion ($398.0 billion)
Digital A2A Payments	Credit Transfers: 2,013.4 billion, value: JPY 3,566.9 trillion

Introduction – Payments in Japan

Japan is an island nation in East Asia, governed as a constitutional monarchy with a parliamentary government. The country is divided into 47 prefectures and is renowned for its advanced infrastructure, high standard of living, and technological innovation. Over the past decade, Japan has undertaken steady regulatory reforms to modernize its financial system and promote cashless payments, while maintaining a strong foundation of consumer protection and operational resilience.

With a population of approximately 125 million, Japan is the world’s third-largest economy and a global leader in technology adoption. Despite its reputation for innovation, Japan’s payments ecosystem has historically been characterized by a strong preference for cash, rooted in cultural habits and a robust ATM and convenience store network. However, recent years have seen a marked acceleration in digital payments adoption, driven by government policy, demographic shifts, and the proliferation of smartphones and high-speed internet. The government’s “Cashless Vision 2018” set the foundation for modernizing Japan’s payment ecosystem, targeting a 40% cashless payment ratio by 2025, later extended with ambitions for 80% in the longer term. Incentives such as merchant subsidies, cashback campaigns, and tax rebates under the “My Number Card integration” have accelerated the transition, especially post-COVID-19.

In recent times, Japan’s payment ecosystem is characterized by the coexistence of cash, card-based transactions, contactless IC card systems, and a growing portfolio of digital wallets and QR code payment services. Unlike several peer economies that have leapfrogged to mobile-first payments, Japan has taken a more incremental and layered approach to digital payments, rooted in trust, safety, and longstanding consumer preferences for cash.

While cash remains prevalent, accounting for about 40% of consumer payments in 2023, card-based payments (particularly credit cards) and contactless options such as iD, QUICPay, and FeliCa-based IC cards are now widely accepted. In recent years, Japan has seen rapid adoption of mobile QR-based payment platforms, led by players such as PayPay, Rakuten Pay, LINE Pay, and au PAY, driven by strategic alliances between telecom operators, e-commerce giants, and financial institutions.

The adoption of digital payments in Japan reflects a blend of practicality and convenience. Consumers are increasingly using mobile devices and connected technologies to facilitate their daily transactions and manage their finances. This includes:

• Scanning QR codes for purchases at a growing number of retail outlets
• Utilising NFC-enabled smartphones and wearables for tap-and-go payments
• Accessing integrated payment services within super apps that combine various lifestyle functions.
• Engaging in e-commerce, where digital wallets and credit cards are the preferred payment methods.

Japan’s payment services are governed by the Payment Services Act (PSA), overseen by the Bank of Japan, the Financial Services Agency (FSA) and the Ministry of Economy, Trade and Industry (METI). The PSA provides a comprehensive regulatory framework for payment service providers, including e-money issuers, funds transfer services, and payment gateway operators, ensuring operational integrity, user protection, and anti-money laundering compliance.

The Bank of Japan (BOJ) is also actively exploring the development of a Central Bank Digital Currency (CBDC), referred to as the “digital yen.” As of June 2025, the BOJ is in its pilot program phase, conducting technical evaluations and collaborating with private sector entities to assess the feasibility and implications of a sovereign digital currency, though no decision on issuance has been made.

Japan’s digital payment landscape is fundamentally shaped by a synergistic interaction of its core payment modes:

• Card-based payments – credit and debit cards (including domestic JCB, Visa, and Mastercard) widely used for large-value and online transactions
• Bank Transfers and Account-to-account (A2A) payments via Zengin System, online banking, and emerging open banking APIs, used for bill payments, business transactions, and P2P transfers
• Mobile wallet and super App-based payments – led by PayPay, Rakuten Pay, and LINE Pay, integrating payments with shopping, loyalty, and financial services
• Prepaid and IC card payments – dominated by transit-linked stored value cards (Suica, PASMO), used widely in daily micro-transactions

Japanese consumers increasingly expect seamless, contactless, and secure payment experiences, whether paying at convenience stores, transferring funds via mobile apps, or purchasing transit passes through NFC-enabled devices. Integrated platforms from banks and telecoms now offer dashboards combining banking, payments, loyalty, and personal finance.

Japan’s payment evolution is guided by incremental innovation, high public trust, and deep collaboration between the public and private sectors. While the pace may appear conservative compared to markets like India or China, Japan’s payment landscape is marked by stability, interoperability, and user-centric design, offering valuable insights for developed economies pursuing secure and inclusive payment modernization.

Legal Framework for Payment Services

Japan’s legal framework for payment services is a multi-layered system coordinated by several key regulatory authorities, with the Financial Services Agency (FSA) and the Ministry of Economy, Trade and Industry (METI) playing central roles. The Bank of Japan (BOJ) also contributes to oversight, particularly for systemic stability and settlement infrastructure. The framework aims to foster innovation, ensure consumer protection, and maintain the integrity and resilience of Japan’s payment ecosystem.

Japan’s regulatory approach is collaborative but segmented, with different authorities overseeing various aspects of the payment ecosystem. The FSA is the primary regulator for payment services, responsible for licensing, supervision, and enforcement of regulations for payment service providers, including banks, non-banks, and fintech companies. METI oversees certain aspects of payment services, especially those related to commerce and retail sectors. BOJ ensures the stability of payment and settlement systems and oversees interbank payment infrastructure. Japan’s approach emphasizes consumer protection, systemic stability, technological neutrality, and incremental innovation, ensuring that both traditional and digital payment services operate within a secure, transparent, and well-regulated environment.

The regulatory framework is legislatively anchored in the Payment Services Act (PSA), which governs the licensing, conduct, and supervision of various categories of payment service providers. This includes fund transfer service providers, prepaid payment instrument (PPI) issuers, credit card companies, electronic payment agents, and crypto asset exchange providers. The framework is designed to support innovation while upholding standards in operational safety, anti-money laundering (AML), and user data protection.

Japan’s legal structure for payment services evolves through periodic revisions and amendments to reflect changes in technology, international standards, and market demand. While innovation is encouraged, the Japanese model prioritizes gradual adoption and consensus-based regulation, reflecting the country’s emphasis on public trust and institutional reliability.

Payment Services Act (PSA), 2009 (as amended) 

The PSA is the cornerstone legislation that governs the regulation, authorization, and oversight of various payment services in Japan. Enacted in 2009 and periodically amended to address market developments, new technologies, and international standards, the PSA provides the statutory basis for regulating different types of payment service providers.

The FSA is the primary authority responsible for licensing, supervising, and enforcing compliance with the PSA, ensuring a robust regulatory environment for these services. The Act covers funds transfer services, E-money issuance, cryptocurrency exchange services, and payment gateway services. Recent amendments to the PSA have further addressed cross-border payment collection services, enhanced consumer protection, and strengthened AML measures for digital payment providers.

Act on Prevention of Transfer of Criminal Proceeds (APTCP)

The APTCP is the central legislation for combating money laundering and terrorist financing in Japan. This Act mandates various financial institutions and payment service providers to implement stringent Know Your Customer (KYC) procedures for onboarding customers and to comply with Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) requirements. This Act applies broadly to banks, credit card companies, fund transfer service providers, e-money issuers, and cryptocurrency exchange service providers. Compliance includes identity verification, transaction monitoring, record-keeping, and suspicious transaction reporting to relevant authorities.

Act on the Protection of Personal Information (APPI)

The APPI egulates the collection, processing, and transfer of personal data within Japan’s financial and digital sectors. The Act applies to all payment service providers and financial institutions that handle user data. It includes requirements for explicit user consent, data minimization, purpose limitation, and cross-border data transfer protocols, making it comparable to global data protection frameworks like the GDPR.

Foreign Exchange and Foreign Trade Act (FEFTA), 1949 (as amended)

FEFTA governs all cross-border payments, remittances, and foreign currency transactions, including the activities of international fund transfer providers and payment processors. The Act requires compliance with foreign currency regulations, sanctions screening, and reporting obligations to ensure alignment with national security and economic policies.

Banking Sector

The Bank of Japan (BOJ) is the central bank of Japan and plays a central role in maintaining monetary stability, financial system integrity, and overseeing the country’s payment and settlement systems. While the BOJ does not directly regulate commercial banks in the manner of prudential supervision, it is responsible for ensuring the safe and efficient functioning of interbank payments, central bank liquidity operations, and the BOJ-NET system, which facilitates large-value settlements and Japanese Government Bond (JGB) transactions. The Financial Services Agency (FSA) serves as the primary regulatory and supervisory authority for banks and other financial institutions in Japan, responsible for licensing, supervision, and enforcement of regulations.

Japan’s legal architecture for financial institutions is built upon a robust set of laws and regulations, including The Banking Act, the PSA, the Financial Instruments and Exchange Act (FIEA), the APTCP, and the APPI. These laws are supported by detailed guidelines and supervisory frameworks issued by the FSA and BOJ, which address emerging risks, promote innovation, and ensure the resilience of Japan’s financial system.

Structure

Japan’s banking sector is characterized by a diverse mix of major commercial banks, regional banks, cooperative financial institutions, and foreign bank branches, all operating within a universal banking model that offers a comprehensive suite of services, including retail and corporate banking, investment, asset management, and digital payments. Japan’s largest banks, often referred to as the “megabanks”, include MUFG Bank, Sumitomo Mitsui Banking Corporation (SMBC), Mizuho Bank. These three megabanks account for a substantial share of Japan’s total banking assets, and have extensive international footprints, offering wholesale, investment, and global transaction services alongside domestic operations. Below the megabank tier, there are regional banks, Shinkin banks and credit cooperatives, foreign banks, and digital banks.

The banking landscape has evolved through strategic alliances, holding company structures, and a carefully managed deregulatory environment under the Financial Services Agency (FSA). While consolidation is less aggressive, demographic pressures, digital transformation, and sustained low interest rates have triggered mergers among some regional banks and cooperative institutions to maintain viability.

As of 2024, according to the FSA, Japan’s financial system included approximately:

• 3 Megabanks
• 34 Bank Holding Companies
• 61 Regional Banks
• Over 250 Shinkin Banks and Credit Cooperatives
• 35 City Banks and Trust Banks
• 55 Foreign Bank Branches
• 9 Digital Banks/Neobanks

Japan’s four largest banks by assets – MUFG Bank, SMBC, Mizuho Bank, and Sumitomo Mitsui Trust Bank – collectively accounted for over 70% of total banking sector assets in 2023, reflecting a high degree of market concentration at the top end of the system. Japanese banks have maintained strong capital bases and stable funding, withstood global shocks and supported ongoing economic recovery.

As of 2023, MUFG alone accounted for 23.3% of total commercial banking system assets, underlining its footprint and influence in Japan’s financial system. MUFG’s continued dominance, alongside other mega-banks like Sumitomo Mitsui Financial Group (SMFG) and Mizuho Financial Group (MHFG), reflects their robust balance sheet strength, extensive domestic and international networks, and significant investments in technology, digital banking capabilities, and diversified financial services. Their strategic importance extends across retail, corporate, and global financial segments, underpinning Japan’s financial stability and competitiveness.

1 - Leading Japanese Banks in 2023
Bank	Ownership	Total Assets ($bn)	Market share
Mitsuibishi UFJ Financial Group	The Master Trust Bank of Japan: 14.81%, Custody Bank of Japan, Ltd: 5.33%, Others: 79.86%	2,826.7	23.3%
Sumitomo Mitsui Financial Group	The Master Trust Bank of Japan: 16.36%, Custody Bank of Japan, Ltd: 6.14%, Others: 77.05%	2,099.8	17.3%
Mizuho Financial Group	The Master Trust Bank of Japan: 15.44%, Custody Bank of Japan, Ltd: 5.18%, Others: 79.38%	1,982.0	16.4%
Japan Post Bank	Japan Post Holdings: 61.5%, The Master Trust Bank of Japan: 8.15%, Others: 30.35%	1,663.3	13.7%
The Norinchukin Bank	Cooperative Entities	709.8	5.9%
Sumitomo Mitsui Trust Holdings	The Master Trust Bank of Japan: 16.04%, Custody Bank of Japan, Ltd: 5.96%, Others: 78%	490.9	4.1%
Fukuoka Financial Group	The Master Trust Bank of Japan: 16.25%, Custody Bank of Japan, Ltd: 9.32%, Others: 74.43%	232.2	1.9%
Concordia Financial Group	The Master Trust Bank of Japan: 15.12%, Custody Bank of Japan, Ltd: 6.14%, Others: 78.74%	173.4	1.4%
Mebuki Financial Group	The Master Trust Bank of Japan: 13.83%, Custody Bank of Japan, Ltd: 6.31%, Others: 79.86%	155.0	1.3%
The Chiba Bank	The Master Trust Bank of Japan: 14.14%, Custody Bank of Japan, Ltd: 5.65%, Others: 80.21%	151.7	1.3%
Leading banks total		10,484.8	86.5%
other banks		1,632.9	13.5%
Total assets		12,117.7	100.0%
Source: Bank's annual reports, Bank of Japan, Yearbook research.

MUFG Bank, Japan’s largest financial institution and a designated Global Systemically Important Bank (G-SIB), has pursued a robust strategy of international expansion, global integration and digital transformation. As of the end of 2023, MUFG operated in over 50 countries and regions, with a global network of more than 1,700 offices (including branches, subsidiaries, and representative offices) across Asia, the Americas, Europe, and Oceania.

MUFG’s international strategy has focused on key global financial centers and emerging markets, with notable investments and partnerships, such as its significant stake in Thailand’s Bank of Ayudhya (Krungsri), the acquisition of a controlling interest in Indonesia’s Bank Danamon, and a longstanding presence in the United States through MUFG Americas Holdings Corporation. Domestically, MUFG maintained a network of more than 400 branches and over 1,400 ATMs, serving tens of millions of customers. Its digital banking platform, MUFG Direct, continued to see rapid growth in user adoption, reflecting the group’s commitment to innovation and customer-centric digital services.

Sumitomo Mitsui Banking Corporation (SMBC) – Japan’s second-largest bank by assets and a major player in both domestic and international markets. As of 2023, SMBC operated in 40+ countries and regions, with a network of over 450 overseas offices and a strong presence in Asia-Pacific, Europe, and the Americas.

SMBC’s global strategy emphasizes corporate and investment banking, trade finance, and cross-border solutions, particularly in fast-growing Asian economies. The bank has established strategic alliances and local subsidiaries in key markets such as China, Singapore, Vietnam, and India. Domestically, SMBC managed a network of around 440 branches and 1,300+ ATMs, supporting a diverse customer base that includes large corporations, SMEs, and retail clients. SMBC is also recognized for its digital innovation, with the SMBC App and online banking services gaining significant traction among consumers.

Mizuho Bank – part of Mizuho Financial Group, is Japan’s third largest “megabank” and a major international financial institution. As of 2023, Mizuho maintained a network of over 100 offices in nearly 40 countries and regions, with a strong focus on Asia, North America, and Europe.

Mizuho’s overseas strategy centers on supporting Japanese corporates operating abroad, expanding into local corporate and investment banking, and developing fintech partnerships. In Japan, Mizuho operated approximately 460 domestic branches and 1,300+ ATMs, serving both retail and institutional clients. The bank’s digital transformation initiatives, including the Mizuho Direct platform and API-driven open banking services, have positioned it as a leader in digital financial services.

Digital Banking

By 2023, Japan’s banking sector had made significant strides in digital transformation, with all major banks and a growing number of “digital-only” banks offering comprehensive digital banking services. These platforms provide customers with mobile banking apps and internet banking portals that support real-time balance checks, domestic and international fund transfers, bill payments, investment management, loan applications, and card controls – all accessible via smartphones and computers.

The rapid adoption of smartphones and high-speed internet, combined with regulatory support and government initiatives to promote cashless payments, has fueled the expansion of digital banking platforms (DBPs) in Japan. All major Japanese banks, including MUFG Bank, SMBC, Mizuho Bank, and leading regional and internet-only banks, offer comprehensive digital banking platforms that provide a full suite of online and mobile services. These services include real-time account balance and transaction history, domestic and international fund transfers via Zengin-Net, utility and tax payments, card issuance and management, as well as loan applications and personal finance management and biometric login and integrated mobile wallet access.

These major banks have invested heavily in cloud-based and AI-driven technologies to deliver seamless, scalable, and secure digital experiences. In particular, the retail banking segment has seen robust growth with customers increasingly seeking efficient, personalized, and convenient banking options. As of 2023, online banking transactions accounted for 13.1% of the total value of payments and withdrawals made from individual accounts at major banks, up from 11.8% the previous year. More than 67% of surveyed Japanese consumers reported using digital payment methods for quick and simple purchases, highlighting the growing acceptance of digital channels for both banking and payments. The market for digital payments, including mobile wallets, contactless payments, and QR code-based solutions, continues to expand, supported by major players such as LINE Pay, Rakuten Pay, and the digital banking arms of leading financial groups.

Japan’s digital banking market is also witnessing the rise of new, branchless digital banks, such as Minna Bank, which launched in 2021 and reached nearly one million customers by March 2024. These digital-only banks offer fully app-based account management, further driving innovation and competition in the sector.

Digital Banking Initiatives of Commercial banks

Mitsubishi UFJ Financial Group (MUFG) – MUFG offers comprehensive mobile banking apps and internet banking services that enable real-time balance inquiries, fund transfers, bill payments, and various other banking transactions. In 2023, MUFG reported significant progress in its digital transformation efforts. The bank highlighted that the number of Mitsubishi UFJ IB (Internet Banking) service users surpassed the 10 million mark to 10.2 million in 2023, indicating a strong shift of customers towards online transactions and positioning it as a leader among Japanese banks in this regard. MUFG is strategically investing in digital finance service providers, particularly in Asia, as part of its “Asia x Digital” strategy. This aims to capture growth in consumer finance and promote financial inclusion by building a unique digital economic sphere.

Sumitomo Mitsui Banking Corporation (SMBC) – SMBC provides a wide range of digital services through its online and mobile platforms, covering retail, wholesale, and global banking operations. These platforms support banking, leasing, securities, credit card, and consumer finance segments. Jenius, SMBC’s digital-savvy life finance solution in Indonesia, reported 5.9 million registered users as of December 2024, reflecting a 13% year-on-year growth.

Mizuho Financial Group – Mizuho Bank has accelerated its digital banking strategy, with a focus on delivering a unified digital experience across retail, SME, and corporate segments. Its digital platform, Mizuho Direct, provides comprehensive online and mobile banking services, including instant transfers, bill payments, investment management, and loan origination. Mizuho has reported growing digital engagement, with a rising share of transactions and customer interactions now taking place through digital channels.

Top Neobanks in Japan

Japan’s digital banking landscape has seen the emergence of a new generation of digital-native financial institutions, often referred to as neobanks. These challenger banks operate through fully digital platforms, offering customer-centric services with enhanced UX, data-driven personalization, and seamless integration across payments, savings, lending, and personal finance tools. Unlike traditional banks, neobanks in Japan typically operate either as licensed banks with a digital-only model or in partnership with incumbent banks and regulated financial institutions, leveraging open APIs and cloud-native infrastructure. The FSA’s support for open banking APIs, along with evolving consumer preferences for mobile-first financial experiences, has catalysed the growth of this sector in recent years.

Rakuten Bank – Rakuten Bank is known for its 24/7 accessibility via its app and convenience store ATMs across Japan. It offers a loyalty program called “Happy Program” that allows customers to earn and spend Rakuten Super Points, integrating banking with the broader Rakuten ecosystem. Its “Money Bridge” service provides preferential interest rates for customers who link their Rakuten Bank and Rakuten Securities accounts. Rakuten Bank has achieved significant scale, becoming the first digital bank in Japan to surpass 15 million accounts as of February 2024 and a JPY 10 trillion deposit balance as of December 2023.

PayPay Bank – Formerly Japan Net Bank, which was one of Japan’s first internet-only banks, it rebranded to PayPay Bank in April 2021, leveraging the strong brand recognition of the popular QR code payment service, PayPay. PayPay Bank is part of the broader PayPay ecosystem, backed by SoftBank and Yahoo Japan. It offers fully digital banking services, including savings accounts, time deposits, debit cards, and instant payments integration with the PayPay mobile wallet. As of late 2024, the bank served over 6 million individual accounts and processes a significant volume of transactions linked to the broader PayPay user base, which exceeds 60 million users.

Minna Bank – Japan’s first fully digital bank built from the ground up, is a subsidiary of Fukuoka Financial Group. Launched in 2021, Minna Bank’s mobile-only model is designed for digital natives and emphasises a fully app-based-interface, cloud-based infrastructure, and API-first architecture. By 2024, Minna Bank had over 1.5 million users, with a high proportion of engagement from younger customers and freelancers. It also licenses its core digital banking platform to overseas markets, establishing itself as a technology exporter in the neobank space.

Sumishin Net Bank – A joint venture between SBI Holdings and Sumitomo Mitsui Trust Bank, Sumishin Net Bank is a leader in online banking innovation in Japan. It provides digital savings and checking accounts, mortgages, investment products, and seamless money transfers. The bank is known for its robust security features, competitive rates, and user-friendly app, serving millions of customers nationwide.

Payment Services

In Japan, the major digital payment services can be grouped into several main categories including:

• Card-based payments
• Prepaid Payment Instruments (PPIs) and E-money
• Account-based payment services
• Account-to-Account (A2A) Payment Services, through interbank networks and API integration
• QR Code-Based Wallets and Embedded Payments

Card Processors and PSPs

Japan’s payment processing ecosystem is highly competitive and technologically advanced, shaped by a mix of established financial institutions, telecom giants, fintech innovators, and global payment networks. The sector includes card processors, ATM/POS network operators, electronic and mobile PSPs, and specialized processors supporting tokenization, card management, and real-time fraud detection.

Issuer and Acquirer Processing

Japanese issuer processors manage the entire cardholder lifecycle, from issuance of credit, debit, and prepaid cards (including both physical and digital forms) to transaction processing, rewards, and security controls. Major issuers include Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG), and Mizuho Group, each leveraging robust digital infrastructure to deliver multi-channel card services across POS, e-commerce, mobile wallets, and contactless environments. According to Nilson, Japan’s issuers accounted for $730.76 billion in purchase volume generated by 227.7 million credit cards in 2023.

Acquirer processing is led by both major banks and specialized third-party companies. These services encompass POS terminal management, transaction routing, settlement, merchant onboarding, risk assessment, and reporting. Value-added features such as advanced analytics, fraud detection, loyalty integration, and support for QR code payments are standard. Acquirers also facilitate interoperability across card schemes (JCB, Visa, Mastercard, American Express) and digital wallets.

Leading Card Processors

JCB Co., Ltd – As Japan’s only major international card brand, JCB plays a dual role as a card network and processor. It issues and acquires cards directly and through partner banks. JCB’s processing systems handle high transaction volumes across Japan’s retail and online environments and are integrated with global networks for cross-border capabilities. JCB also operates QUICPay, one of the leading contactless payment systems in Japan.

GMO Payment Gateway (GMO-PG) – one of Japan’s largest and most influential e-commerce payment processors and a major player in Japan’s online payment gateway market, serving over 140,000 merchants, including major online retailers, travel platforms, and utility services. GMO-PG supports a wide array of payment methods, including credit cards, bank transfers, convenience store payments (Konbini), various e-money options, and popular mobile QR code payments. It focuses on offering highly secure and stable payment solutions, integrating with numerous online merchants across diverse industries. GMO-PG is expanding into B2B payments, BNPL services, and embedded finance offerings in partnership with banks and enterprise platforms.

Rakuten Payment, Inc. – part of Rakuten Group, Rakuten Payment integrates card processing, digital wallet services (Rakuten Pay), loyalty points (Rakuten Points), and merchant settlement in a unified ecosystem. akuten Payment focuses on expanding the reach of Rakuten Pay and other cashless payment services. It serves as a significant acquirer for QR code payments and e-money, particularly for merchants that are part of the Rakuten network or wish to attract Rakuten users. Its strategy involves integrating payments with Rakuten’s loyalty program, encouraging widespread adoption among both consumers and merchants.

Card Brands and Card Types

Japanese banks and financial institutions issue a comprehensive range of payment cards, including debit cards, credit cards, and prepaid cards, supporting both domestic and international transactions. The principal card networks in Japan are JCB (Japan Credit Bureau), Visa, Mastercard, and American Express, with UnionPay also accepted at select merchants and ATMs.

• Debit Cards – Visa, Mastercard, JCB
• Credit Cards – Visa, Mastercard, JCB, AMEX, Diners
• Prepaid Cards – either open-loop (usable at any merchant accepting the card brand) or closed-loop (merchant or service-specific). Popular prepaid cards include JCB Prepaid, Rakuten Edy, and various e-money cards for transit and retail purchases.
• Co-Branded and Affinity Cards – Japanese issuers frequently partner with airlines, retailers, e-commerce platforms, and service providers to issue co-branded cards. These cards offer benefits such as loyalty points, cashback, travel insurance, and exclusive promotions. Examples include JCB-affiliated airline cards, Rakuten Card, and ANA Visa/Mastercard cards.

Card Usage Trends

• Japan had 466 million debit cards and 313 million credit cards in circulation as of end-2023, according to BIS data.
• Progressive shift to cashless payment methods. In 2023, the cashless payment ratio reached 39.3%, and it further accelerated to 42.8% in 2024, surpassing the government’s initial goal of 40% by 2025.
• Credit cards remain the most popular non-cash payment method and Credit cards are the primary payment method for online purchases, accounting for approximately 55% of e-commerce transactions in 2024.
• Cash is still relevant, used in 39% of point-of-sale transactions in 2024

Advanced Payment Services

In the Yearbooks, advanced payment services are classified as online wallets, e-wallets, and/or mobile wallets with any type of payment service chosen by the wallet user to complete the payment.

PayPal – PayPal is available in Japan, primarily facilitating international payments. As of end-2023, PayPal reported more than 431 million active customer accounts globally, down 0.91% from 435 million in 2022. During 2022, PayPal added approximately 8.6 million net new active accounts, ending the year with 435 million active consumer and merchant accounts. PayPal’s total payment volume increased to $1.52 trillion in 2023 (up 11.7% from $1.36 trillion in 2022) and customer engagement grew to an average of 58 transactions per active account, driving 13% growth in transactions per active account at the end of 2023.

In May 2022, PayPal Ventures invested in Modulr, an embedded payments platform for digital businesses, as part of a $108 million Series C funding round led by General Atlantic, Blenheim Chalcot, Frog Capital, and Highland Europe. Modulr delivers payments infrastructure for over 200 top-tier customers, including Revolut, Wagestream, Sage and BrightPay, and processes an annualised transaction value of more than £100 billion.

In 2023, PayPal is exploring the sale of Xoom, its international money transfer subsidiary, in a bid to cut costs and focus on high-growth business areas. Also, Stax Payments – an all-in-one payment provider for businesses – announced its partnership with PayPal in July 2023. This partnership will allow PayPal’s users to easily make payments with more than 20,000 merchants of Stax through a fast checkout process as well as new payment options such as Buy-now-pay-later solutions.

In 2023, PayPal launched its own US Dollar denominated stablecoin, PayPal USD (PYUSD), which is fully backed by US dollar deposits, short-term US treasuries, and similar cash equivalents and designed for digital payments and Web3. Eligible US PayPal customers who purchase PayPal USD will be able to transfer the token to external wallets, send person-to-person payments, fund purchases at checkouts supported by PayPal, and convert cryptocurrency holdings to and from PayPal USD.

In January 2024, PayPal launched AI-powered features to drive personalised offerings for both merchants and customers based on the data it possesses. These features include Smart Receipts (for merchants) which predicts what shoppers may want to buy next from the merchant. The merchant can then offer personalised recommendations, and cashback offers on this receipt. A major feature for users is CashPass which will use give users personalized cashback offers based on an AI analysis of their spending activity.

In March 2024, PayPal launched a complete suite of payment processing tools for online small businesses in the UK, Canada, and across more than 20 European markets. The PayPal Complete Payments package enables small businesses to accept an expanded range of payment instruments including PayPal, buy now pay later, Apple Pay, Google Pay, credit and debit cards, and alternative payment methods from around the world. By April 2024, PayPal added new features to its complete payments solution for small businesses to enable small businesses to accept a range of payments including PayPal, Venmo and PayPal Pay Later products. PayPal also gave small businesses access to four new features to help them drive payment acceptance and enhance how they run their business, and this will include Apple Pay as a checkout option.

Amazon Pay – In 2016, Amazon (US) launched its checkout payment service, Amazon Pay, enabling customers to pay for goods and services in participating third-party merchant websites. All active Amazon account holders can use Amazon login and password at the checkout. More than 50 million customers have used Amazon Pay to make purchases globally, with more than half of these coming from Amazon Prime Members.

Digital Payment Services

In the Yearbooks, digital payment services are classified as card-based payment services using EMV tokenisation security on the internet combined with HCE NFC technology in the case of contactless payments at POS terminals.

As of 2024, the Click to Pay online payment checkout service is available in Japan for online shoppers using Visa and Mastercard cards, supported by a number of Japanese banks. Click to Pay replaced the previous MasterPass and VISA Checkout services respectively. Click to Pay is a joint service between Mastercard, Visa, Discover and American Express, enabling consumers to make secure one-click payments without having to enter card details or passwords online.

Most Japanese banks now issue NFC-enabled credit and debit cards across JCB, Visa, Mastercard, and American Express brands. Customers can use these contactless cards to tap and pay at a wide network of contactless POS terminals, especially in urban and suburban retail environments, convenience stores, supermarkets, and public transport systems. Contactless payment adoption is further supported by integration with mobile wallets such as Apple Pay, Google Pay, and Osaifu-Keitai. In line with guidelines set by issuers and payment networks, contactless payment limits without PIN or signature are typically capped at ¥10,000 per transaction, balancing user convenience with fraud risk controls. Transactions exceeding this threshold may require authentication via PIN entry or biometric verification on mobile wallets.

Apple Pay has become one of the world’s most used digital payment methods. Its user base increased from 521.4 million to 535.8 million in 2022. By 2024, the total number of Apple Pay users was estimated at 640 million and is projected to exceed 700 million by 2027.

According to Apple’s Q2 last 2022, they saw a record of transactions with more than 1.8 billion processed during the quarter, up 40% year-over-year. This payment method is also available in over 90% of the US and 60% of stores globally.

Apple Pay is the #1 most popular digital wallet with a 92% market share, processing a global total of $6 trillion in payments in 2022 and produced a revenue of $1.9 billion.

As of 2023, Apple Pay processed 14.2% of all online consumer payments and 3.5% of all in-store purchases.

Around 51% of global iPhone users have enabled Apple Pay in 2022. There are 10 million Apple Pay-friendly contactless payment terminals worldwide.

The transactions made using Apple Pay are mostly in-store purchases, online transactions, and peer-to-peer payments. It is trendy for contactless payments, especially during the COVID-19 pandemic.

In 2024, an estimated 60.2 million Apple Pay users in the United States; projections indicate that over 75 million consumers will use Apple Pay by 2030. Putting it all together, Apple Pay is increasingly becoming an effective customer acquisition and retention feature for Apple. In June 2022, Apple Pay added Apple Pay Later, its buy-now-pay-later service, allowing users to split purchases into four equal instalments with no interest or fees. Initially launched in the US, the service is expected to roll out to other countries during 2023. In 2023, Apple launched its Card savings account from Goldman Sachs with a 4.15% annual percentage yield. Apple Wallet users can set up and manage a savings account directly from Apple Card in Wallet, with no fees, no minimum deposits, and no minimum balance requirements.

As of 2024, Apple Pay was available in Japan and supported by 202 banks and payment service providers.

Google Pay has 150 million active users across 42 global markets.

In January 2022, it was reported that the company was planning to transform Google Pay into a “comprehensive digital wallet”, following the app’s reported slow growth and the shutdown of Plex. In April, it was reported that Google was planning to revive the “Google Wallet” branding in a new app or interface and integrated with Google Pay. Google officially announced Google Wallet on May 11, 2022, at the 2022 Google I/O keynote. The app began rolling out on Android smartphones on July 18, replacing the 2018 app and co-existing with the 2020 Google Pay app in the US. While the app name itself was changed from Google Pay to Google Wallet, the service name of actually paying for things online or in-store remains “Google Pay.”.

In the US, Google Pay has over 25.2 million users.  Also, Google Pay is used on nearly 800,000 websites as a secure payment gateway. Roughly 20% of all mobile purchases are made using this digital payment processor.

As of 2024, Google Pay was supported by several banks and payment service providers in Singapore.

Samsung Pay is available in 29 countries worldwide and has an estimated 140 million users. Samsung Pay works with Galaxy phones, including the latest Galaxy S22. Samsung claims that its system will work with almost all point-of-sale systems: NFC, magnetic stripe and EMV (Europay, Mastercard and Visa) terminals for chip-based cards. In June 2022, Samsung Pay announced the launch of Samsung Wallet, enabling users to organise payment, loyalty, and gift cards into one app.

Samsung officially launched Samsung Wallet in Japan on February 25, 2025, with full functionality rolling out on February 28, 2025.

Exchange Rates

The Japanese Yen (JPY) is the domestic currency in Japan. The JPY depreciated against the USD from JPY 110.50/$ in 2019 to JPY 140.60/$ in 2023.

2 - Average Exchange Rates
	2018	2019	2020	2021	2022	2023
1 EUR in JPY	130.40	122.01	121.85	129.88	138.03	151.99
1 USD in JPY	110.50	109.00	106.70	109.90	131.60	140.60
Source: ECB, BIS.

Card Issuers – Overview

Japanese financial institutions and specialized companies issue a comprehensive range of payment cards, including credit cards, debit cards, prepaid cards, and an increasing number of co-branded and virtual card offerings. These products are designed to cater to the diverse financial needs of individuals, small and medium-sized enterprises (SMEs), and corporate clients.

The card portfolio includes dedicated offerings for specific customer segments: mass-market and digital natives, students and first-time cardholders, affluent and high-net-worth individuals (HNIs), small business, freelancers, and MSMEs clients, and lifestyle-linked clients. Credit card tiers typically range from standard and gold to platinum and premium cards, with some issuers offering metal cards and exclusive invitation-only products such as JCB The Class. Co-branded cards are widely prevalent, often linked to airlines, retail chains, e-commerce platforms, fuel providers, and entertainment services, providing tailored rewards and lifestyle benefits.

According to Nilson, Japan’s issuers accounted for $730.76 billion in purchase volume generated by 227.7 million credit cards in 2023.

Japan’s card issuance ecosystem is dominated by JCB, Visa, Mastercard, AMEX, and UnionPay.

Leading issuers include major banking groups such as Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG), and prominent digital players like Rakuten Card. Table 3 illustrates the card brands accepted by the leading issuers in Japan as of 2024.

Outlook – By mid-2024, card issuers in Japan face the following notable challenges:

• Competition from UPI & alternative payments
• Disruption from Fintechs & digital banks – BNPL, prepaid cards, co-branded digital offerings
• Shifting consumer expectations to highly personalised, seamless, and digital-first experiences
• Promoting Financial Literacy for Digital Products
• Implementation of evolving security standards including the mandatory implementation of 3D-Secure 2.3 for online payments to mitigate fraud risk
• Strengthening risk-based authentication (RBA), biometric authentication
• Expansion of contactless infrastructure

3 - Leading Card Issuers in Japan
Domestic Issuers	Issued Card Brands	Owned by
Sumitomo Mitsui Card	Mastercard, VISA, JCB, UnionPay	Sumitomo Mitsui Financial Group (SMFG)
Mitsubishi UFJ Nicos	MUFG card, DC card, NICOS, JCB	Mitsubishi UFJ Financial Group (MUFG)
Rakuten	Mastercard, Visa, AMEX, JCB	Hiroshi Mikitani: 18.75%, Haruko Mikitani: 6.15%, Japan Post holdings: 6.08%, Others: 69.02%
Credit Saison	Mastercard, VISA, AMEX, JCB	The Master Trust Bank of Japan: 23.45%, Custody Bank of Japan, Ltd: 9.37%, Others: 67.18%
Aeon Financial Service	Mastercard, Visa, JCB	AEON: 48.19%, Others: 51.81%
UC Card	Mastercard, Visa	Credit Saison
Toyota Finance	Mastercard, Visa, AMEX, JCB	Toyota Motor Corporation (TMC)
Epos Card	Visa	MARUI GROUP CO., LTD
Orient Corporation	Mastercard, Visa, JCB	Mizuho Bank: 48.66%, ITOCHU Corporation: 16.53%, Govt of Japan: 4.37%, Others: 30.44%
Source: Nilson report, PCM research

Acquiring and Acceptance in Japan

Japan’s acquiring landscape is highly developed and technologically advanced, featuring a strong presence of bank-led acquirers, payment service providers (PSPs), and merchant service integrators. Acquirers enable merchants across sectors, including retail, hospitality, e-commerce, transport, and services, to accept multi-channel payments, including POS, contactless (NFC), QR-code-based, and online transactions. The acquiring market is supported by both traditional financial institutions and payment technology companies, offering merchant onboarding, hardware/software integration, settlement services, fraud management, and value-added capabilities.

The leading acquiring institutions in Japan include JCB, Mitsubishi UFJ Financial Group (MUFG), Aeon Financial Service, Credit Saison, and Orient corporation.

These players enable merchants to accept a broad range of payment instruments such as:

• Card payments (Visa, Mastercard, JCB, AMEX, Diners club, UnionPay)
• QR code payments
• Contactless/NFC Payments
• Digital wallets (Apple Pay, Google Pay, Samsung Wallet)
• Buy Now Pay Later (BNPL) options
• Online and In-App Payments

Many bank-led acquirers operate and manage their own extensive ATM and POS networks, while fintech acquirers typically leverage cloud-based infrastructure and often partner with third-party processors for aspects like transaction routing, reconciliation, and streamlined merchant onboarding.

Table 4 illustrates the card brands accepted by the leading domestic acquirers as of 2024.

4 - Leading Acquirers in Japan
Domestic Acquirers	Acceptance Brands offered	Owned by
JCB	JCB	Private Ownership
Mitsubishi UFJ Nicos	Mastercard, VISA, JCB, AMEX, UnionPay	Mitsubishi UFJ Financial Group (MUFG)
Aeon Financial Service	Mastercard, VISA, JCB, AMEX, Diners Club	AEON: 48.19%, Others: 51.81%
Credit Saison	Mastercard, VISA, JCB, AMEX, UnionPay, Diners Club	The Master Trust Bank of Japan: 23.45%, Custody Bank of Japan, Ltd: 9.37%, Others: 67.18%
Orient Corp	Mastercard, VISA, JCB, AMEX, UnionPay, Diners Club	Mizuho Bank: 48.66%, ITOCHU Corporation: 16.53%, Govt of Japan: 4.37%, Others: 30.44%
Source: Nilson report, PCM research

Outlook – By mid-2024, acquirers in Japan face the following notable challenges:

• Low Penetration in Micro and Small Merchant Segments
• Meeting Evolving Security and Compliance Standards
• Integrating Diverse Payment Methods – mix of credit cards, e-money options, and QR code payment schemes
• Driving Growth in Contactless and Mobile Payments
• Continuous Innovation with Emerging Payment Models – software-based POS on smartphones

ATM Terminal Infrastructure

In Japan, ATMs are primarily owned, operated, and managed by banks, consumer finance companies, convenience store chains, and independent ATM providers. The operational model includes both in-house ATM networks maintained by financial institutions and outsourced ATM services managed by specialized companies to optimize deployment, maintenance, and cash replenishment. This multi-vendor approach, underpinned by robust regulatory oversight from the Financial Services Agency (FSA) and the Bank of Japan (BOJ), ensures high levels of service reliability, security, and operational efficiency nationwide. Major banks such as MUFG Bank, SMBC, Mizuho Bank, and Japan Post Bank operate extensive nationwide ATM networks, covering branches, train stations, shopping centers, and retail hubs. In parallel, non-bank operators like E-net, Lawson Bank, Seven Bank (7-Eleven), and AEON Bank manage large-scale ATM deployments in convenience stores, which account for a significant portion of 24/7 ATM access across the country.

Japanese ATMs are equipped with advanced security features, including EMV (chip and PIN) compliance, biometric authentication (such as palm vein or fingerprint scanning at select banks), and anti-skimming technologies. The migration to EMV standards was completed across most ATMs by the late 2010s, in line with global best practices. ATM usage in Japan is subject to fee structures set by individual banks and ATM operators, often varying by time of day, ATM type, and ATM operators. Most banks allow a certain number of free ATM transactions per month for their own customers, with fees typically applied to additional withdrawals or transactions at other banks’ ATMs.

In 2023, there were 117,549 ATMs, down by 2.86% from 2022. There were 158.6 million cash withdrawals (-2.40%) with a total value of JPY 9.73 billion (+0.24%) showing continued decline from the COVID-19 pandemic. There were 112.5 cash withdrawals per ATM per month, and the ATV per ATM cash withdrawal amounted to JPY 61,376, equivalent to $436.53.

5 - ATMs and Cash Withdrawals in Japan
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
ATM Terminals with cash function	136,086	133,886	129,873	124,917	121,006	117,549	114,191	-2.86%	-13.62%	-2.89%
Ø Number of TXs per ATM per month	140.4	131.8	114.6	110.8	111.9	112.5	113.0	0.47%	-19.92%	-4.35%
Number of ATM cash withdrawals (m)	229.4	211.7	178.6	166.1	162.6	158.6	154.8	-2.40%	-30.83%	-7.11%
- withdrawals on Japanese cards (bn)	229.4	211.7	178.6	166.1	162.6	158.6	154.8	-2.40%	-30.83%	-7.11%
Value of ATM cash withdrawals (JPY bn)	11,439.1	10,977.0	10,054.0	9,674.2	9,714.0	9,737.3	9,725.6	0.24%	-14.88%	-3.17%
- withdrawals on Japanese cards (YEN bn)	11,439.1	10,977.0	10,054.0	9,674.2	9,714.0	9,737.3	9,725.6	0.24%	-14.88%	-3.17%
ATV per ATM withdrawal (JPY)	49,875.1	51,850.2	56,298.4	58,240.4	59,759.3	61,376.4	63,977.13	2.71%	23.06%	4.24%
# ATM Terminals per 1m capita - Japan	1,076.3	1,061.2	1,029.4	995.3	968.5	945.3	918.3	-2.39%	-12.17%	-2.56%
Source: BIS.

Among the banks, SBI reported the largest number of ATMs (63,580) while HDFC reported 20,928 ATMs and cash recycle machines and ICICI had 16,277 ATMs.

Mobile Payments – Overview

In 2023, Japan maintained a high rate of mobile phone subscriptions as 178% of Japanese people have subscribed to a mobile phone according to the International Telecommunication Union (ITU). As of early 2024, more than 120 million people in Japan had internet access, and more than 80% of the population regularly accessed the internet via smartphones. The widespread adoption of 4G and 5G networks, coupled with a mature device market and affordable data plans, has fostered a digitally connected society. Japan’s population is highly engaged with mobile technology, with smartphones serving as the primary device for internet access, communication, commerce, and financial transactions. Tablet usage continues to rise, supporting a multi-device digital lifestyle across all age groups. In 2023, there were 11.8 million fixed telephone subscribers compared with 221.9 mobile phone contracts in Japan.

Japan’s journey in mobile-based financial activity began early, notably with the introduction of FeliCa chips in mobile phones in 2004, which laid the groundwork for mobile wallets and contactless payments well before many other global markets. The country has experienced a steady rise in mobile-based financial activity, driven by the proliferation of smartphones, government cashless initiatives, and the expansion of digital payment infrastructure. According to a 2023 MIC survey, over 70% of Japanese smartphone users reported using mobile payment services for everyday purchases, including food, transportation, and retail shopping.

The government’s “Cashless Vision” and campaigns such as the My Number Card integration have further accelerated the adoption of digital and mobile payments, with a focus on enhancing convenience, security, and financial inclusion.

6 - Internet Use in Japan
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23
Fixed telephone subscribers (Individuals, in 000s)	17,242.0	15,954.0	14,856.0	13,827.0	12,767.0	11,829.0	10,970.3	-7.35%
Mobile phone contracts	177,816.0	184,898.0	194,395.0	202,998.0	210,686.0	221,918.0	231,972.7	5.33%
Mobile subscribers per 100 inhabitants	142.5%	148.3%	155.7%	160.9%	167.5%	178.0%	186.1%	6.25%
B2C online e-commerce revenue (JPY bn)			23,861.1	25,337.4	28,892.6	31,813.4	34386.30	10.11%
Annual B2C e-commerce growth rate/year		NA	NA	6.2%	14.0%	10.1%	8.1%	−
Ø B2C e-commerce amount per capita	¥0.0	¥0.0	¥189,123.1	¥201,888.4	¥231,239.2	¥255,833.9	¥276,524.2	10.64%
Source: Statistics Japan, ITU.

Japan’s mobile payment landscape is characterized by key initiatives and solutions including:

• QR code-based payments – via PayPay, LINE Pay, and Rakuten Pay
• Mobile wallets with major players including Apple Pay, Google Pay, and Osiafu-Keitai
• Mobile banking applications of Banks in Japan, supporting real-time account management, fund transfers, bill payments, and integration with digital wallets and QR code payment services.
• Contactless Card payments via mobile – Contactless card tokenization for tap-to-pay via NFC-enabled phones using mobile wallets such as Google Pay and Apple Pay

Mobile payments have become a central pillar of Japan’s digital payment ecosystem, accounting for a significant share of retail and P2P transactions. The interoperability of QR code platforms, integration with loyalty programs, and government incentives continue to drive growth and innovation in the sector.

Japan’s mobile payment environment is characterized by a high degree of consumer trust, technological sophistication, and ongoing collaboration between banks, telecoms, fintechs, and retailers, positioning the country as a leader in cashless and digital payments.

Instant Payments

Japan maintains a robust and evolving instant payments infrastructure, designed to support real-time fund transfers across individuals, businesses, and institutions. These systems operate 24 hours a day, 365 days a year, offering fast, secure, and efficient interbank settlements, while meeting the expectations of a highly digitized consumer and enterprise environment.

The Zengin System, operated by the Japanese Banks’ Payment Clearing Network (Zengin-Net), serves as the core of the country’s domestic clearing and settlement architecture. In October 2018, Zengin-Net launched the “More Time System”, a major enhancement that enabled real-time, round-the-clock settlement for retail interbank credit transfers. The adoption of instant payments has accelerated significantly, driven by the integration of Zengin’s real-time capabilities into mobile banking apps, QR code payment platforms, and digital wallets.

The BOJ-NET, established in 1988, serves as the backbone of Japan’s large-value payment and securities settlement systems. It operates on a Real-Time Gross Settlement (RTGS) basis, meaning payment instructions are processed immediately and individually, ensuring immediate finality for high-value interbank transactions. The BOJ-NET has undergone continuous enhancements, including extended operating hours to overlap with international financial markets, further facilitating cross-border settlements.

In June 2024 alone, Japan recorded approximately 943.6 million QR code and barcode payments, reflecting the popularity of immediate, frictionless transactions for everyday purchases. The number of active QR code payment users surged from 3.55 million to 75.8 million by 2023, with leading platforms such as PayPay, Rakuten Pay, and LINE Pay facilitating instant, account-linked payments for both in-store and online transactions.

Central Bank Digital Currencies, Cryptocurrency Products

In 2023, Japan’s payment ecosystem was characterized by a dynamic mix of deeply entrenched cash usage, steady growth in credit card transactions, and a rapid embrace of digital innovation supported by robust regulation and government initiatives. While cryptocurrency activity remained relatively subdued and lightly regulated, the Bank of Japan (BOJ) continued its phased exploration of a Central Bank Digital Currency (CBDC), conducting pilot programs to assess technical feasibility and integration with existing payment infrastructures.

Central Bank Digital Currencies (CBDC) – The Digital Cash Challenge

Central bank digital currency (CBDC), also called digital fiat currency or digital base money, is a digital currency issued by a national central bank (NCB), rather than by a commercial bank. It is also a liability of the NCB and denominated in the sovereign currency, as is the case with physical banknotes and coins.

All CBDCs are under the authority of the respective national central bank, and they are part of the domestic cash payment ecosystem. Rather than a new currency, CBDC is a form of central bank electronic money that could be used by households and businesses to make payments. In addition, most CBDC implementations will likely not use or need any sort of distributed ledger such as a blockchain.

Unlike “retail CBDC,” which is generally designed as a central bank liability universally accessible to individuals and businesses within a jurisdiction’s financial system, “wholesale CBDC” refers to a digitized central bank liability designed for sizable (generally interbank) transactions, and for which access is limited to certain financial institutions.

National Central Banks (NCBs) have been providing trusted money to the public for hundreds of years as part of their public policy objectives. Trusted money is a public good. It offers a common unit of account, store of value and medium of exchange for the sale of goods and services and settlement of financial transactions. Providing cash for public use is an important tool for central banks. Yet the world is changing.

Even before COVID-19, cash use for payments was declining fast and convenient digital payments have grown enormously in volume and diversity. To evolve and pursue their public policy objectives in a digital world, central banks are actively researching the pros and cons of offering a digital currency to the public, a “general purpose” CBDC.

Central banks’ interest in CBDC has increased as a potential means of delivering their public policy objectives. Profound, ongoing changes across finance, technology and society, as well as the recent COVID-19 crisis, provided additional impetus for the research of, and experimentation related to, CBDCs.

CBDC is a national digital currency issued by the central bank that is expected to replace or coexist with fiat money and hold the same value. Mobile money, on the other hand, utilises existing commercial banking-based accounting to manage customer wallet balances based on an exchange with cash or lines of credit and loans.

CBDC is a direct liability on the central bank as it is the main issuer of the currency, whereas digital money is the liability of commercial banks and other authorised financial institutions using funds on account. Although some implementation approaches propose that CBDC can be implemented in either an indirect or hybrid form, its liability remains on the respective national central bank.

Background on CBDC Evolution

In October 2020, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, Sveriges Riksbank, the Swiss National Bank and the Bank for International Settlements (BIS) published a report, Central bank digital currencies: foundational principles and core features, identifying the foundational principles necessary for any publicly available CBDC to help central banks meet their public policy objectives.

The report focused on a publicly available “general purpose” CBDC (a digital payment instrument, denominated in the national unit of account, that is a direct liability of the central bank).

A “wholesale” CBDC, restricted to financial institutions, is also an active area of exploration, notes the report, for central banks but one that carries different opportunities, challenges, and risks. The report explored the use cases for, and challenges and opportunities arising from, the possible issuance of a general purpose CBDC.

In September 2021, the same seven central banks and the BIS followed up with the publication of a new set of reports exploring the potential of retail CBDCs, including policy options and practical implementation issues. While none of the central banks has yet decided to proceed with a retail CBDC, they recognise such an instrument would have wide-ranging implications. Delivering on the future needs of consumers would require systems that encourage innovation, choice and competition among a diverse mix of intermediaries.

• The first report explores how private-public collaboration and interoperability can be designed into CBDC systems to achieve this objective. In particular, policies about privacy and access to payment data would be key design elements in order to maintain public trust.
• The second report focuses on how a CBDC could best serve people and businesses in a fast-changing technological landscape. Lessons from previous payment innovations compiled in the report, show that success often requires harnessing network effects and not requiring users to obtain new devices. Nonetheless, there would not be a “one-size-fits-all” solution and CBDC adoption strategies would need to consider multiple perspectives through public consultations.
• The third report outlines the possible impact of CBDC issuance on banking systems, in terms of intermediation capacity and overall resilience. Preliminary analysis highlights the importance of allowing the financial system time to adjust and the flexibility to use safeguards to influence CBDC adoption.

BIS reported that a 2021 survey of central banks found that “86% are actively researching the potential for CBDCs, 60% were experimenting with the technology and 14% were deploying pilot projects.

The People’s Bank of China (PBoC) is piloting a ‘digital yuan’, known as e-CNY, in various cities, often in association with major sporting events, such as the Winter Olympics.

The ECB published a paper on the potential of a “digital euro” in October 2020, exploring the “benefits and risks” of such an initiative. It completed a public consultation in January 2021 and a series of focus groups in December 2021. Its investigation stage is expected to continue until October 2023, after which the ECB “will decide whether to start developing a digital euro.”

The US Federal Reserve reported in February 2022 that while it has made no decisions about “whether to pursue or implement” a CBDC, it was “exploring the potential benefits and risks of CBDCs from a variety of angles and was inviting public feedback on discussion papers.

The Bank of Japan said in October 2020 that it had no plans for a CBDC and was committed to maintain the cash system as long as there was public demand for it. It nevertheless intended to explore technical feasibility through a proof of concept, consider institutional arrangements and coordinate approaches with domestic and international stakeholders. In 2023, the Bank of Japan (BOJ) has announced that it will begin a pilot for its digital yen with commercial financial institutions. In February 2023, Bank of Japan has embarked on a CBDC trial.

While CBDCs are still in experimental phases across major economies, 2024 has seen increased momentum towards real-world implementation, with several countries, notably China and the ECB, moving closer to full-scale rollouts. Public-private collaboration, technological innovation, and privacy concerns remain central to future CBDC development. Central banks worldwide continue to balance innovation with maintaining public trust and financial stability in this rapidly evolving space.

Global Status of CBDCs

Most National Central Banks (NCBs) are involved in different stages of a CDBC project. Especially, the NCBs have different views on which kind of CDBC they would intend to launch as a digital currency:

• A “retail-CBDC” designed as an NCB liability universally accessible to individuals and businesses within a jurisdiction’s financial system.
• A “wholesale-CBDC” that refers to a digitized central bank liability designed for sizable (generally interbank) transactions, and for which access is limited to participating financial institutions.
• Both a “retail-CDBC” and a “wholesale-CDBC”.

As of 2023, the global CDBC status reveals that four central banks – Nigeria (e-Naira), Eastern Caribbean (D-Cash), Jamaica (JAM-DEX), and the Bahamas (Sand Dollar) – have introduced a domestic CBDC scheme.

Six countries have launched a CDBC pilot: France, Canada, China, India, Saudi Arabia, and Ghana.

The NCBs of most other countries are involved in either a CDBC proof-of-concept phase – including Norway, Hungary, and Sweden – or they are still in a CDBC research stage.

So far, Ecuador is the only country that has cancelled its CBDC ambitions, Dinero electronico.

CBDC and Japan

As of June 2025, the Bank of Japan (BOJ) is actively engaged in the pilot program phase for a potential Central Bank Digital Currency (CBDC), referred to as the “digital yen.” The BOJ has adopted a methodical and phased approach to its development, prioritizing technical evaluation and careful consideration of its implications for Japan’s payment ecosystem.

The BOJ began its CBDC journey with Phase 1 of proof-of-concept (PoC) in April 2021, followed by Phase 2 in April 2022, which focused on additional functionality including limits, offline capabilities, and interoperability with existing systems. In April 2023, the BOJ entered a CBDC pilot program, involving cooperation with major private-sector financial institutions, payment providers, and technology firms to explore end-to-end system integration and simulate real-world use cases.

While the primary focus of the pilot is a general-purpose retail CBDC, intended for a wide range of users and mirroring the roles of physical cash, the BOJ is also exploring broader applications, including wholesale CBDC experiments. These efforts contribute to international initiatives, such as Project Agorá led by the Bank for International Settlements (BIS), which investigates the tokenization of wholesale central bank money on programmable platforms.

Despite ongoing technical progress and stakeholder engagement, the BOJ continues to maintain that it has no immediate plans to issue a CBDC, emphasizing that any decision would depend on future public demand. Public awareness and demand for a CBDC remain relatively low, and the central bank continues to emphasize the importance of addressing issues such as privacy, cybersecurity, scalability, and coexistence with existing payment methods before moving toward a full-scale launch.

Pros and Cons of CBDCs

According to research by the Bank of England, BIS, and by several other central banks, the benefits of CBDCs include supporting increased innovation in the payment system with:

• ‘Programmable money’ that enables transactions to occur according to certain conditions, rules or events
• Automatic payment of taxes at the POS
• Allowing the government to make direct transfers to individuals
• Automatic payment of dividends directly to shareholders
• Electricity meters paying suppliers directly based on power usage
• Making ‘micropayments’ at much lower costs
• A more reliable and attractive alternative to stablecoins (see Stablecoins section below)
• A well-designed CBDC could help to retain some of the beneficial characteristics of cash that current electronic bank deposits don’t. A CBDC might focus more on promoting privacy or support financial inclusion
• CBDCs could facilitate better cross-border payments systems by linking CBDCs to speed up cross-border payments
• More effective transmission of monetary policy
• Changes in base rates could be passed onto consumers more quickly and efficiently.

Possible challenges related to use of CBDCs could include:

• Disintermediation and reducing the banking sector’s balance sheet – When someone converts bank deposits to CBDC, they reduce the size of the commercial bank’s overall holdings. This process of disintermediation is an inevitable consequence of introducing a CBDC. If banks’ balance sheets were to reduce too much and too quickly, they might need to seek funding from elsewhere. This could push up the cost of their lending to businesses and consumers.
• Risk of bank runs – introducing a CBDC could potentially make it easier for runs on the banking system to occur. At the moment, such factors as the difficulty of storing large amounts of cash limit such risks. A CBDC would remove many of those limits.
• Offline usage – the CBDC payment system would probably require a connection to the central ledger, which may not always be available. While it might still be possible to initiate a payment, the recipient would have to trust the sender to have sufficient funds. There is also a risk of someone attempting to spend the same money twice.
• Cyber-attack – BIS warns that a successful attack on a CBDC system could quickly threaten many users, as well as their faith in the system. This is because there would be so many ‘endpoints’ in a linked, centralised system.  This would make a CBDC system a critical piece of national infrastructure.
• Data privacy – Fully anonymous CBDC are unlikely to be permitted due to the need to comply with know-your-customer and anti-money laundering checks. A CBDC would inevitably allow more tracking and less anonymity than cash does. BIS suggests that “a key national policy question will be deciding who can access which parts of [this data] and under what circumstances”.

Unregulated Cryptocurrency Products – Background

Regulators and national central banks are challenged by unregulated independent cryptocurrency products. Whereas CBDCs are under the authority of the central bank, almost all cryptocurrencies are decentralised, and not controlled or managed by any central authority.

Obviously, financial market authorities and the national central banks are not in favour of unregulated cryptocurrency products, and they see them as a systematic risk for the financial system. Their intention to regulate the respective cryptocurrency exchange platforms has gained momentum.

Cryptocurrencies, originally designed as a store of value, are digital assets, developed and maintained on decentralised blockchains, and they can be used as a medium of exchange or payment method. Bitcoin and Ethereum are the most popular forms of cryptocurrencies worldwide used by consumers and businesses for transactions.

As of 2022, over 400 million people worldwide used cryptocurrencies, with merchants and businesses in more sectors accepting it as a form of payment. The major payment schemes VISA and Mastercard, PayPal and along with a growing number of financial institutions, have launched services allowing consumers to purchase or use cryptocurrencies for a range of applications.

According to a 2022 Deloitte survey, around two-thirds (64%) of surveyed merchants indicated that their customers have significant interest in using digital currencies for payments, and 83% expect consumer interest in digital currencies for payments to increase or significantly increase over the next 12 months.

In addition, merchants are motivated by the prospect of enabling immediate access to funds (40% of respondents), taking advantage of blockchain-based innovations in decentralised digital finance (39%), and allowing in-house management of the revenue cycle/treasury/finance department (39%).

Over half (54%) of large retailers (with revenues of $500 million and up) have invested more than $1 million on enabling digital currency payments, while only 6% of small retailers (with revenues of under $10 million) did so.

A 2022 survey from Checkout.com found a sharp rise in people wanting to use cryptocurrencies as a means of payment, with 40% of 18-35-year-old consumers citing their desire to experiment with using crypto as a payment method, up from less than 30% in 2021. Meanwhile, over 80% of businesses say offering crypto has attracted new customers, led to a decrease in chargebacks, while just over 60% have seen higher authorisation rates accepting crypto payments.

A recent report by Triple-A put cryptocurrency ownership in Europe at around 49 million people.

Stablecoins

Stablecoins are a type of asset-backed cryptocurrency, whose value is typically pegged to the value of an underlying asset such as USD, GBP, or commodities like gold. Stablecoins are partially backed by real assets, and they are designed to have a value pegged to real-world assets, therefore avoiding the extreme volatility that affects cryptocurrencies.

Stablecoins offer the potential benefits of cryptocurrencies, like transparency, security, immutability, and decentralised control, while maintaining the guarantees and stability that come with using fiat currency. Stablecoins have potential to be used in cross-border payments, providing a secure, online environment for peer-to-peer (P2P) transactions to take place without needing decentralised cryptocurrencies or to pay fees to convert money into local currencies.

As of 2024, there were more than 200 stablecoins globally, comprising a market that’s worth approximately $174 billion.

A survey of central banks in January 2021 found that two-thirds of respondents are actively researching the potential impact of stablecoins on financial stability. However, some regulators in the US and China, consider stablecoins as a potential serious risk to financial systems. The risk is especially high with centralised coins, such as those backed by fiat and issued by private organisations, as economic power would be disproportionately concentrated on a single entity.

The widespread use of stablecoins in payment platforms could also pose a systemic risk, in relation to the validation and confirmation of stablecoin transactions which could interfere with payment systems. If stablecoin users couldn’t access money in their e-wallets and businesses couldn’t receive payments, economic activity would be greatly disrupted. However, these risks have not deterred major institutions like JP Morgan and VISA to explore stablecoin use cases via partnerships and internal R&D.

Tether As of 2024, Tether remains the largest stablecoin globally, holding a market share of over 50%. This dominance is driven by its widespread usage and liquidity in crypto markets. Its nearest competitors include USD Coin (USDC), Binance USD (BUSD), and decentralized stablecoins like DAI, although Tether’s market share far exceeds them. Recent reports have shown Tether’s involvement in major financial markets and even Bitcoin mining, further reinforcing its stronghold on the crypto landscape.

Regarding Facebook’s Diem (formerly Libra) project, it was officially abandoned. Diem’s assets were sold off to Silvergate Capital in early 2022, marking the end of the initiative that once aimed to create a globally accessible digital currency. Regulatory pressures and internal challenges led to the dissolution of the project.

Market Size and Dynamics

Cards in Issue

Based on data from BIS, there were 780.2 million bank cards in Japan by end-2023, up by 0.81% from 2022. Debit cards amounted to 59.8% of the card base while credit cards accounted for 40.2%. In total, there were 6.27 cards per capita at end 2023.

In total, there were 466.5 million (+0.26%) debit cards in circulation in 2023 and credit cards totalled 313.6 million (+1.63%).

7 - Cards Issued in Japan
(000s)	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Cards with ATM (cash) function	337550	338200	336060	334550	331410	330,110	329,074.1	-0.39%	-2.20%	-0.44%
Cards with a payment function	729,066	746,752	751,767	760,634	773,994	780,227	782,182.4	0.81%	7.02%	1.37%
- Cards with a debit function	445,126	453,792	456,457	459,624	465,394	466,587	465,390.9	0.26%	4.82%	0.95%
- Cards with a credit function	283,940	292,960	295,310	301,010	308,600	313,640	316,791.4	1.63%	10.46%	2.01%
Cards total	729,066	746,752	751,767	760,634	773,994	780,227	782,182.4	0.81%	7.02%	1.37%
- Cards with e-money function	402,122	449,889	490,291	524,925	569,793	616,076	465,390.9	8.12%	53.21%	8.91%
Payment cards per capita	5.77	5.92	5.96	6.06	6.19	6.27	6.29	1.29%	8.82%	1.70%
Note: there are a few payment cards without cash function.
Source: BIS.

Card Fraud

Japan’s rapid expansion of digital payments, driven by widespread credit and debit card adoption, e-commerce growth, and mobile transactions, has been accompanied by a significant rise in card-related fraud. Despite ongoing advancements in security technologies and regulatory measures, card fraud, particularly in card-not-present (CNP) transactions, remains a critical risk for both consumers and financial institutions.

According to the Japan Consumer Credit Association (JCA), credit card fraud losses reached ¥54.1 billion (approximately $345 million) from January to December 2023. This marks a significant increase from ¥43.6 billion in 2022 and represents the highest figure on record, highlighting a persistent escalation of fraud incidents. The majority of these losses, about 50.5 billion yen in 2023, were attributed to the fraudulent use of credit card numbers, especially in online and remote transactions. The sophistication and frequency of fraud incidents continue to escalate, with criminals leveraging advanced phishing tactics, social engineering, and system vulnerabilities to exploit both cardholders and merchants.

Fraud techniques are constantly evolving, including the use of AI-powered attacks and coordinated schemes targeting both individuals and businesses. Notably, repeated follow-up attacks are common once a card has been compromised, and fraudsters often test cards with small transactions before executing higher-value purchases. The impact of these crimes is further amplified by the growing popularity of trading cards, digital currencies, and high-value online goods as targets for illicit transactions.

The Japanese government, through the Ministry of Economy, Trade and Industry (METI), and industry bodies like the Japan Consumer Credit Association (JCA), have implemented and continually update comprehensive security measures to address the rising threat of card and internet fraud. The Ministry of Economy, Trade and Industry (METI) has mandated the implementation of 3D Secure 2.0 for all e-commerce merchants, requiring additional identity verification such as one-time passwords for online purchases. Card issuers and payment processors have also introduced tokenization, real-time fraud monitoring, card control features, and transaction limits to mitigate risks. From April 1, 2025, all online credit card payments in Japan are required to undergo 3D Secure (3DS) authentication. This is a critical regulatory move to mitigate rising CNP fraud.

Card Use

The use of cards in the country has shown remarkable growth. Total card payments have shown a compound annual growth rate of 15.55% between 2019 and 2023. Specifically, credit cards accounted for 96.5% of payments and has grown by a CAGR of 15.21% over the last 5 years.

In 2023, Japanese cards accounted for 25.80 billion payments (+15.10%) with a total value of JPY 109.56 trillion, up by 12.80% from 2022. The ATV per card payment was JPY 4,246.84 ($30.21), and there was an average of 33.1 payments per card per year.

8 - Payments with Japanese Cards
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Cards with a payment function	729,066	746,752	751,767	760,634	773,994	780,227	782,182	0.81%	7.02%	1.37%
Ø payments per card per year	17.2	20.8	23.6	25.4	29.0	33.1	38153.3	14.18%	92.49%	13.99%
Ø payment value per card per year	¥93,408	¥100,783	¥102,058	¥110,238	¥125,494	¥140,430	€123,965.6	11.90%	50.34%	8.50%
Payments (m)	12,524.0	15,551.4	17,760.0	19,336.0	22,414.9	25,799.7	29,842.8	15.10%	106.00%	15.55%
- with debit cards (m)	259.9	377.9	524.6	653.4	770.5	904.2	1,160.3	17.35%	247.93%	28.32%
- with credit cards (m)	12,264.1	15,173.6	17,235.4	18,682.5	21,644.4	24,895.5	28,682.6	15.02%	103.00%	15.21%
Value of payments (JPY bn)	68,100.79	75,259.80	76,724.05	83,850.92	97,131.37	109,567.09	96,963.73	12.80%	60.89%	9.98%
- with debit cards (JPY bn)	1,413.09	1,828.70	2,266.45	2,833.62	3,338.77	3,839.89	4,689.74	15.01%	171.74%	22.13%
- with credit cards (JPY bn)	66,687.70	73,431.10	74,457.60	81,017.30	93,792.60	105,727.20	92,273.99	12.72%	58.54%	9.65%
ATV per card payment	¥5,437.64	¥4,839.41	¥4,320.04	¥4,336.53	¥4,333.34	¥4,246.84	€3,249.15	-2.00%	-21.90%	-4.82%
Source: BIS.

Card Use Per Capita

Card use in Japan is relatively low compared to top countries in East Asia. In 2023, there were 7.27 debit card payments per capita (+17.91%) while credit card use was 200.2 payments per capita (+15.57%). In total, there were 207.5 payments.

9 - Card Payments Per Capita in Japan
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Debit card payments	2.06	3.00	4.16	5.21	6.17	7.27	8.6	17.91%	253.78%	28.75%
Debit card value	¥101.14	¥132.98	¥168.36	¥205.44	¥203.05	¥219.62	¥256.47	8.16%	117.15%	16.78%
Credit card payments	97.0	120.3	136.6	148.9	173.2	200.2	169.0	15.57%	106.41%	15.60%
Credit card value	¥4,772.97	¥5,339.59	¥5,530.94	¥5,873.94	¥5,704.11	¥6,047.13	¥6,340.17	6.01%	26.70%	4.85%
Total card payments	99.0	123.3	140.8	154.1	179.4	207.5	177.6	15.65%	109.47%	15.94%
Total card value	¥4,874.11	¥5,472.56	¥5,699.30	¥6,079.38	¥5,907.16	¥6,266.75	¥6,596.64	6.09%	28.57%	5.15%
Source: calculated using BIS data, population figures and exchange rates.

Debit Card Use

In 2023, there were 0.90 billion debit card payments (+17.35%) with a total value of JPY 3.8 trillion (+15.01% vs 2022). The ATV per debit card payment accounted for JPY 4,246.84 ($30.21), and there were 1.9 payments per debit card per year.

10 - Payments with Japanese Debit Cards
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Debit Cards	445,126	453,792	456,457	459,624	465,394	466,587	465,391	0.26%	4.82%	0.95%
Ø payments per debit card per year	0.6	0.8	1.1	1.4	1.7	1.9	4.9	17.05%	231.93%	27.12%
Ø payments value (JPY) per debit card per year	3,174.6	4,029.8	4,965.3	6,165.1	7,174.1	8,229.7	13,437.5	14.72%	159.24%	20.99%
Payments (m)	259.87	377.88	524.64	653.43	770.48	904.18	2,258.70	17.35%	247.93%	28.32%
Value of payments (JPY bn)	1,413.09	1,828.70	2,266.45	2,833.62	3,338.77	3,839.89	6,253.69	15.01%	171.74%	22.13%
ATV per debit card payment (JPY)	5,437.64	4,839.41	4,320.04	4,336.53	4,333.34	4,246.84	2,768.72	-2.00%	-21.90%	-4.82%
Total debit card payments per capita	0.2	0.3	0.4	0.5	0.5	0.6	1.6	16.32%	232.59%	27.17%
Total debit card value per capita (JPY)	1,028.0	1,316.5	1,615.9	2,003.7	2,342.3	2,670.2	4,348.7	14.00%	159.76%	21.04%
Source: BIS.

Credit Card Use

In 2023, there were 24.89 billion credit card payments (+15.02%) with the total value JPY 105.72 billion (+12.72% from 2022). The ATV per credit card payment was JPY 4,246.84 ($30.21), and there were 79.4 payments per credit card per year.

11 - Payments with Japanese Credit Cards
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Credit Cards	283,940	292,960	295,310	301,010	308,600	313,640	316,791	1.63%	10.46%	2.01%
Ø payments per credit card per year	43.2	51.8	58.4	62.1	70.1	79.4	90.5	13.17%	83.77%	12.94%
Ø payments value (jpy) per credit card per year	234,865.5	250,652.3	252,133.7	269,151.5	303,929.4	337,097.3	291,276.8	10.91%	43.53%	7.49%
Payments (m)	12,264.08	15,173.55	17,235.39	18,682.53	21,644.39	24,895.51	28,682.58	15.02%	103.00%	15.21%
Value of payments (JPY bn)	66,687.70	73,431.10	74,457.60	81,017.30	93,792.60	105,727.20	92,273.99	12.72%	58.54%	9.65%
ATV per credit card payment (JPY)	5,437.64	4,839.41	4,320.04	4,336.53	4,333.34	4,246.84	3,217.07	-2.00%	-21.90%	-4.82%
Total credit card payments per capita	8.9	10.9	12.3	13.2	15.2	17.3	19.9	14.94%	94.04%	14.18%
Total credit card payments value per capita (JPY)	48,512.2	52,865.0	53,084.7	57,288.3	65,799.8	73,520.2	64,165.2	14.86%	51.55%	8.67%
Source: BIS.

E-Money

In Japan, e-money services are regulated primarily under the Payment Services Act and supervised by the Financial Services Agency (FSA) and the Bank of Japan (BOJ). Operators of prepaid payment instruments (PPIs) must register with or obtain authorization from the relevant authorities, depending on the scale and nature of their services.

Japan’s e-money products are broadly offered in the form of:

• Prepaid IC cards – for public transportation and retail shops
• Mobile wallets including QR-code and NFC-enabled e-wallets
• Integrated Payment Solutions – in super Apps or payment platforms such as in ride-hailing or e-commerce

As of 2023, leading e-money players include:

• Digital Wallets – PayPay, Rakuten Pay, Line Pay, au PAY
• Prepaid IC Cards – Suica, Pasmo, Icoca

These e-money instruments are widely used across Japan for a broad range of transactions, including retail purchases, public transportation, utility payments, vending machines, tolls, and peer-to-peer (P2P) transfers.

In addition, non-bank entities and technology platforms are active participants in the market, often operating under the “prepaid payment instrument issuer” framework. Consumer protection measures, such as limits on stored value and mandatory safeguarding of funds, are key regulatory features.

In 2023, there were 616,076 e-money cards in circulation in Japan, according to BIS data and the bank of Japan reported that these cards were used in 6.15 billion transactions worth JPY 6.40 trillion.

12 - E-Money in Japan
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 3Y	CAGR 3Y
- Cards with e-money function	402,122	449,889	490,291	524,925	569,793	616,076	666,118	8.12%	25.66%	4.67%
Ø payments per e-money card per year	0.0	0.0	12080.6	10934.9	10323.0	9992.3	9,672	-3.20%	-17.29%	-3.72%
Number of E-Money Payments (m)	0.0	0.0	5,923.0	5,740.0	5,882.0	6,156.0	6,442.8	4.66%	3.93%	0.77%
Value of E-Money Payments (JPY bn)			6,034.2	5,969.6	6,084.1	6,406.6	6,746.2	5.30%	6.17%	1.20%
Value per Transaction (JPY)	NA	NA	¥1,018.77	¥1,040.00	¥1,034.36	¥1,040.71	¥1,047.10	0.61%	2.15%	0.43%
Source: BIS, Bank of Japan.

Leading Card Issuers

Sumitomo Mitsui Card Company (SMCC), a core subsidiary of Sumitomo Mitsui Financial Group (SMFG), is one of Japan’s largest credit card issuers. As of the end of FY2023, SMCC had over 45 million cards in circulation, including credit, debit, and prepaid cards.

In 2023, the company issued approximately 3.8 million new credit cards, driven by a strong focus on digital onboarding, mobile-first issuance, and cross-channel marketing. SMCC maintains a strong presence in both consumer and business card segments, offering a full range from standard to premium and platinum-tier cards, integrated with Visa Touch and QUICPay for contactless payments.

Strategic partnerships include co-branded products with Amazon Japan, NTT Docomo, and ANA, and the company has significantly expanded its presence in mobile payments through Apple Pay and Google Pay integration. 

Mitsubishi UFJ NICOS (MUFG Card) a subsidiary of Mitsubishi UFJ Financial Group (MUFG), is a prominent credit card issuer in Japan, managing over 39 million cards in circulation as of FY2023. In the same fiscal year, MUFG NICOS issued more than 2.9 million new credit cards, targeting both retail and corporate customer segments. MUFG Card offers a diverse product range, including Gold, Platinum, and corporate expense cards, along with co-branded cards with Toyota, JAL, and major retailers. In 2023, Mitsubishi UFJ NICOS processed 1.784 trillion transactions, indicating a very significant volume of card activity.

Rakuten Card – Rakuten Card announced in December 2023 that the total number of cards issued has surpassed 30 million. This milestone was part of its “Triple 3” mid-term targets, highlighting its rapid growth and widespread adoption. In 2023, the company added over 4.5 million new cards, with approximately 90% of these issued digitally via Rakuten’s web and mobile platforms. The company leads in e-commerce-linked card usage, benefitting from tight integration with the Rakuten Points ecosystem, which incentivizes high-frequency transactions across online shopping, mobile payments, and travel. Rakuten Card is widely accepted at merchants both online and offline and offers seamless tokenization via Rakuten Pay, Apple Pay, and Google Pay. Co-branded partnerships include Japan Airlines (JAL), Lawson, and Ichiba Mall, further expanding its reach across consumer segments.

Data Tables

Japan 2025 Market Overview
Payment Organisation	Japanese Banks’ Payment Clearing Network (Zengin-Net)- the primary operator of Japan’s domestic interbank payment system established as a subsidiary of the Japanese Bankers Association (JBA).
Domestic Payment Brands	Japan Credit Bureau (JCB); co-branded with Discover, Diners Club, and UnionPay for international use. Zengin System is the mobile A2A payment service in Japan.
Market Structure	Card usage in Japan quite low compared to other East Asian countries at 207.5 card payments per capita in 2023. Evolving Open Banking payment ecosystem
Notable Market Trends	Dominance of credit card in non-cash transactions, Shift towards cashless payments, Lingering relevance of cash payments, Expansion in credit and BNPL options.
Major Card Issuers	SMCC, MUFJ Nicos, Rakuten, Credit Saison.
Major Card Acquirers	JCB, MUFJ Nicos, AEON.
Major Card Processors	JCB, GMO Payment Gateway, Rakuten Payment.

Japan Key Statistics 2023
Population	124.35 billion, with 6.27 bank cards per capita.
Cards	Debit: 466.5 million Credit: 313.6 million E-money: 616.0 million Total: 780.22 billion
Card Payments	Debit: 0.90 billion; value JPY 3.84 trillion ($27.3 billion) Credit: 24.89 billion; value JPY 105.72 trillion ($751.9 billion) Total: 25.80 billion; value JPY 109.56 trillion ($779.2 billion)
ATMs	117,549
ATM Withdrawals	All cards: 6.75 billion; value: JPY 32.87 billion ($398.0 billion)
Digital A2A Payments	Credit Transfers: 2,013.4 billion, value: JPY 3,566.9 trillion

1 - Leading Japanese Banks in 2023
Bank	Ownership	Total Assets ($bn)	Market share
Mitsuibishi UFJ Financial Group	The Master Trust Bank of Japan: 14.81%, Custody Bank of Japan, Ltd: 5.33%, Others: 79.86%	2,826.7	23.3%
Sumitomo Mitsui Financial Group	The Master Trust Bank of Japan: 16.36%, Custody Bank of Japan, Ltd: 6.14%, Others: 77.05%	2,099.8	17.3%
Mizuho Financial Group	The Master Trust Bank of Japan: 15.44%, Custody Bank of Japan, Ltd: 5.18%, Others: 79.38%	1,982.0	16.4%
Japan Post Bank	Japan Post Holdings: 61.5%, The Master Trust Bank of Japan: 8.15%, Others: 30.35%	1,663.3	13.7%
The Norinchukin Bank	Cooperative Entities	709.8	5.9%
Sumitomo Mitsui Trust Holdings	The Master Trust Bank of Japan: 16.04%, Custody Bank of Japan, Ltd: 5.96%, Others: 78%	490.9	4.1%
Fukuoka Financial Group	The Master Trust Bank of Japan: 16.25%, Custody Bank of Japan, Ltd: 9.32%, Others: 74.43%	232.2	1.9%
Concordia Financial Group	The Master Trust Bank of Japan: 15.12%, Custody Bank of Japan, Ltd: 6.14%, Others: 78.74%	173.4	1.4%
Mebuki Financial Group	The Master Trust Bank of Japan: 13.83%, Custody Bank of Japan, Ltd: 6.31%, Others: 79.86%	155.0	1.3%
The Chiba Bank	The Master Trust Bank of Japan: 14.14%, Custody Bank of Japan, Ltd: 5.65%, Others: 80.21%	151.7	1.3%
Leading banks total		10,484.8	86.5%
other banks		1,632.9	13.5%
Total assets		12,117.7	100.0%
Source: Bank's annual reports, Bank of Japan, Yearbook research.

2 - Average Exchange Rates
	2018	2019	2020	2021	2022	2023
1 EUR in JPY	130.40	122.01	121.85	129.88	138.03	151.99
1 USD in JPY	110.50	109.00	106.70	109.90	131.60	140.60
Source: ECB, BIS.

3 - Leading Card Issuers in Japan
Domestic Issuers	Issued Card Brands	Owned by
Sumitomo Mitsui Card	Mastercard, VISA, JCB, UnionPay	Sumitomo Mitsui Financial Group (SMFG)
Mitsubishi UFJ Nicos	MUFG card, DC card, NICOS, JCB	Mitsubishi UFJ Financial Group (MUFG)
Rakuten	Mastercard, Visa, AMEX, JCB	Hiroshi Mikitani: 18.75%, Haruko Mikitani: 6.15%, Japan Post holdings: 6.08%, Others: 69.02%
Credit Saison	Mastercard, VISA, AMEX, JCB	The Master Trust Bank of Japan: 23.45%, Custody Bank of Japan, Ltd: 9.37%, Others: 67.18%
Aeon Financial Service	Mastercard, Visa, JCB	AEON: 48.19%, Others: 51.81%
UC Card	Mastercard, Visa	Credit Saison
Toyota Finance	Mastercard, Visa, AMEX, JCB	Toyota Motor Corporation (TMC)
Epos Card	Visa	MARUI GROUP CO., LTD
Orient Corporation	Mastercard, Visa, JCB	Mizuho Bank: 48.66%, ITOCHU Corporation: 16.53%, Govt of Japan: 4.37%, Others: 30.44%
Source: Nilson report, PCM research

4 - Leading Acquirers in Japan
Domestic Acquirers	Acceptance Brands offered	Owned by
JCB	JCB	Private Ownership
Mitsubishi UFJ Nicos	Mastercard, VISA, JCB, AMEX, UnionPay	Mitsubishi UFJ Financial Group (MUFG)
Aeon Financial Service	Mastercard, VISA, JCB, AMEX, Diners Club	AEON: 48.19%, Others: 51.81%
Credit Saison	Mastercard, VISA, JCB, AMEX, UnionPay, Diners Club	The Master Trust Bank of Japan: 23.45%, Custody Bank of Japan, Ltd: 9.37%, Others: 67.18%
Orient Corp	Mastercard, VISA, JCB, AMEX, UnionPay, Diners Club	Mizuho Bank: 48.66%, ITOCHU Corporation: 16.53%, Govt of Japan: 4.37%, Others: 30.44%
Source: Nilson report, PCM research

5 - ATMs and Cash Withdrawals in Japan
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
ATM Terminals with cash function	136,086	133,886	129,873	124,917	121,006	117,549	114,191	-2.86%	-13.62%	-2.89%
Ø Number of TXs per ATM per month	140.4	131.8	114.6	110.8	111.9	112.5	113.0	0.47%	-19.92%	-4.35%
Number of ATM cash withdrawals (m)	229.4	211.7	178.6	166.1	162.6	158.6	154.8	-2.40%	-30.83%	-7.11%
- withdrawals on Japanese cards (bn)	229.4	211.7	178.6	166.1	162.6	158.6	154.8	-2.40%	-30.83%	-7.11%
Value of ATM cash withdrawals (JPY bn)	11,439.1	10,977.0	10,054.0	9,674.2	9,714.0	9,737.3	9,725.6	0.24%	-14.88%	-3.17%
- withdrawals on Japanese cards (YEN bn)	11,439.1	10,977.0	10,054.0	9,674.2	9,714.0	9,737.3	9,725.6	0.24%	-14.88%	-3.17%
ATV per ATM withdrawal (JPY)	49,875.1	51,850.2	56,298.4	58,240.4	59,759.3	61,376.4	63,977.13	2.71%	23.06%	4.24%
# ATM Terminals per 1m capita - Japan	1,076.3	1,061.2	1,029.4	995.3	968.5	945.3	918.3	-2.39%	-12.17%	-2.56%
Source: BIS.

6 - Internet Use in Japan
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23
Fixed telephone subscribers (Individuals, in 000s)	17,242.0	15,954.0	14,856.0	13,827.0	12,767.0	11,829.0	10,970.3	-7.35%
Mobile phone contracts	177,816.0	184,898.0	194,395.0	202,998.0	210,686.0	221,918.0	231,972.7	5.33%
Mobile subscribers per 100 inhabitants	142.5%	148.3%	155.7%	160.9%	167.5%	178.0%	186.1%	6.25%
B2C online e-commerce revenue (JPY bn)			23,861.1	25,337.4	28,892.6	31,813.4	34386.30	10.11%
Annual B2C e-commerce growth rate/year		NA	NA	6.2%	14.0%	10.1%	8.1%	−
Ø B2C e-commerce amount per capita	¥0.0	¥0.0	¥189,123.1	¥201,888.4	¥231,239.2	¥255,833.9	¥276,524.2	10.64%
Source: Statistics Japan, ITU.

7 - Cards Issued in Japan
(000s)	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Cards with ATM (cash) function	337550	338200	336060	334550	331410	330,110	329,074.1	-0.39%	-2.20%	-0.44%
Cards with a payment function	729,066	746,752	751,767	760,634	773,994	780,227	782,182.4	0.81%	7.02%	1.37%
- Cards with a debit function	445,126	453,792	456,457	459,624	465,394	466,587	465,390.9	0.26%	4.82%	0.95%
- Cards with a credit function	283,940	292,960	295,310	301,010	308,600	313,640	316,791.4	1.63%	10.46%	2.01%
Cards total	729,066	746,752	751,767	760,634	773,994	780,227	782,182.4	0.81%	7.02%	1.37%
- Cards with e-money function	402,122	449,889	490,291	524,925	569,793	616,076	465,390.9	8.12%	53.21%	8.91%
Payment cards per capita	5.77	5.92	5.96	6.06	6.19	6.27	6.29	1.29%	8.82%	1.70%
Note: there are a few payment cards without cash function.
Source: BIS.

8 - Payments with Japanese Cards
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Cards with a payment function	729,066	746,752	751,767	760,634	773,994	780,227	782,182	0.81%	7.02%	1.37%
Ø payments per card per year	17.2	20.8	23.6	25.4	29.0	33.1	38153.3	14.18%	92.49%	13.99%
Ø payment value per card per year	¥93,408	¥100,783	¥102,058	¥110,238	¥125,494	¥140,430	€123,965.6	11.90%	50.34%	8.50%
Payments (m)	12,524.0	15,551.4	17,760.0	19,336.0	22,414.9	25,799.7	29,842.8	15.10%	106.00%	15.55%
- with debit cards (m)	259.9	377.9	524.6	653.4	770.5	904.2	1,160.3	17.35%	247.93%	28.32%
- with credit cards (m)	12,264.1	15,173.6	17,235.4	18,682.5	21,644.4	24,895.5	28,682.6	15.02%	103.00%	15.21%
Value of payments (JPY bn)	68,100.79	75,259.80	76,724.05	83,850.92	97,131.37	109,567.09	96,963.73	12.80%	60.89%	9.98%
- with debit cards (JPY bn)	1,413.09	1,828.70	2,266.45	2,833.62	3,338.77	3,839.89	4,689.74	15.01%	171.74%	22.13%
- with credit cards (JPY bn)	66,687.70	73,431.10	74,457.60	81,017.30	93,792.60	105,727.20	92,273.99	12.72%	58.54%	9.65%
ATV per card payment	¥5,437.64	¥4,839.41	¥4,320.04	¥4,336.53	¥4,333.34	¥4,246.84	€3,249.15	-2.00%	-21.90%	-4.82%
Source: BIS.

9 - Card Payments Per Capita in Japan
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Debit card payments	2.06	3.00	4.16	5.21	6.17	7.27	8.6	17.91%	253.78%	28.75%
Debit card value	¥101.14	¥132.98	¥168.36	¥205.44	¥203.05	¥219.62	¥256.47	8.16%	117.15%	16.78%
Credit card payments	97.0	120.3	136.6	148.9	173.2	200.2	169.0	15.57%	106.41%	15.60%
Credit card value	¥4,772.97	¥5,339.59	¥5,530.94	¥5,873.94	¥5,704.11	¥6,047.13	¥6,340.17	6.01%	26.70%	4.85%
Total card payments	99.0	123.3	140.8	154.1	179.4	207.5	177.6	15.65%	109.47%	15.94%
Total card value	¥4,874.11	¥5,472.56	¥5,699.30	¥6,079.38	¥5,907.16	¥6,266.75	¥6,596.64	6.09%	28.57%	5.15%
Source: calculated using BIS data, population figures and exchange rates.

10 - Payments with Japanese Debit Cards
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Debit Cards	445,126	453,792	456,457	459,624	465,394	466,587	465,391	0.26%	4.82%	0.95%
Ø payments per debit card per year	0.6	0.8	1.1	1.4	1.7	1.9	4.9	17.05%	231.93%	27.12%
Ø payments value (JPY) per debit card per year	3,174.6	4,029.8	4,965.3	6,165.1	7,174.1	8,229.7	13,437.5	14.72%	159.24%	20.99%
Payments (m)	259.87	377.88	524.64	653.43	770.48	904.18	2,258.70	17.35%	247.93%	28.32%
Value of payments (JPY bn)	1,413.09	1,828.70	2,266.45	2,833.62	3,338.77	3,839.89	6,253.69	15.01%	171.74%	22.13%
ATV per debit card payment (JPY)	5,437.64	4,839.41	4,320.04	4,336.53	4,333.34	4,246.84	2,768.72	-2.00%	-21.90%	-4.82%
Total debit card payments per capita	0.2	0.3	0.4	0.5	0.5	0.6	1.6	16.32%	232.59%	27.17%
Total debit card value per capita (JPY)	1,028.0	1,316.5	1,615.9	2,003.7	2,342.3	2,670.2	4,348.7	14.00%	159.76%	21.04%
Source: BIS.

11 - Payments with Japanese Credit Cards
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 5Y	CAGR 5Y
Credit Cards	283,940	292,960	295,310	301,010	308,600	313,640	316,791	1.63%	10.46%	2.01%
Ø payments per credit card per year	43.2	51.8	58.4	62.1	70.1	79.4	90.5	13.17%	83.77%	12.94%
Ø payments value (jpy) per credit card per year	234,865.5	250,652.3	252,133.7	269,151.5	303,929.4	337,097.3	291,276.8	10.91%	43.53%	7.49%
Payments (m)	12,264.08	15,173.55	17,235.39	18,682.53	21,644.39	24,895.51	28,682.58	15.02%	103.00%	15.21%
Value of payments (JPY bn)	66,687.70	73,431.10	74,457.60	81,017.30	93,792.60	105,727.20	92,273.99	12.72%	58.54%	9.65%
ATV per credit card payment (JPY)	5,437.64	4,839.41	4,320.04	4,336.53	4,333.34	4,246.84	3,217.07	-2.00%	-21.90%	-4.82%
Total credit card payments per capita	8.9	10.9	12.3	13.2	15.2	17.3	19.9	14.94%	94.04%	14.18%
Total credit card payments value per capita (JPY)	48,512.2	52,865.0	53,084.7	57,288.3	65,799.8	73,520.2	64,165.2	14.86%	51.55%	8.67%
Source: BIS.

12 - E-Money in Japan
	2018	2019	2020	2021	2022	2023	2024F	GR 22/23	GR 3Y	CAGR 3Y
- Cards with e-money function	402,122	449,889	490,291	524,925	569,793	616,076	666,118	8.12%	25.66%	4.67%
Ø payments per e-money card per year	0.0	0.0	12080.6	10934.9	10323.0	9992.3	9,672	-3.20%	-17.29%	-3.72%
Number of E-Money Payments (m)	0.0	0.0	5,923.0	5,740.0	5,882.0	6,156.0	6,442.8	4.66%	3.93%	0.77%
Value of E-Money Payments (JPY bn)			6,034.2	5,969.6	6,084.1	6,406.6	6,746.2	5.30%	6.17%	1.20%
Value per Transaction (JPY)	NA	NA	¥1,018.77	¥1,040.00	¥1,034.36	¥1,040.71	¥1,047.10	0.61%	2.15%	0.43%
Source: BIS, Bank of Japan.