April 15, 2024

Cashless in Japan: understanding what’s available and how to use it

One of the most pressing concerns when visiting or living in Japan is: how do you pay for things? Not long ago, the most immediate answer was cold hard cash. But a strong movement toward contactless payments has fostered a dizzying array of options. Below is a summary of the options available (and their ubiquity) for tourists and residents alike.

The rapid advance of cashless payments

A banner outside Maruetsu Petit, a grocery store chain in Japan, showing more than a dozen mobile payment and e-money methods the store accepts (credit card options are not listed).

When we started UJ, I wrote about cashless payments in Japan. The state back then, in 2018, was… well, less than good. Japan was clearly behind most of the rest of the world – particularly South Korea and China – in contactless payments. Credit card usage was low and cash was king.

That changed quickly in 2018 with the introduction of mobile payment app PayPay. Combined with a certain public health crisis that required reducing human contact, the use of cash in Japan accelerated rapidly.

Maybe also quickly. As cashless payments increased, the number of ways to pay cashless also increased. The country has seen an explosion of solutions, to the point where some stores support more than two dozen payment methods. And that’s not an exaggeration:

However, despite this proliferation, only about 36% of all payments in Japan will be cashless as of 2022. And while many stores accept payment methods popular in other Asian countries, many of the native payment methods They are not accessible to visitors. This is in contrast to China, where cashless usage is high and many cashless payment methods now support linking a non-Chinese bank account.

The three types of cashless in Japan

Mobile payments
Image: Ushico/PIXTA (ピクスタ)

I’m going to discuss the different types of cashless payments a little off topic. I will first introduce the ones that tourists can use and then cover which ones are available to residents. In both cases, I will list each option according to the number of stores that accept that payment method, from highest to lowest.

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In general, there are three forms of cashless payment to consider. The first is Credit cards. I’ll have more to say about these, and how many stores support them, below.

The other two forms of cashless payment are electronic money (電子マネー) and mobile payment or smartphone payment (モバイル決済;スマホ決済). They both use your smartphone but differ slightly. Electronic money requires maintaining a prepaid balance on your phone. Mobile payment allows prepaid loading but also offers the option to pay later.

The two methods also differ in how the transaction is processed. Mobile payment generally requires a cellular network connection to process the transaction. If the network is down, you cannot make a payment. On the contrary, payment with electronic money will work even in areas with poor reception or during a network outage.

Cashless payment options for everyone (even tourists)

With that introduction made, let’s look at the best cashless payment options for everyone, including short-term visitors. After that, I’ll look at the ones you can access if you’re a resident.

Credit card

Statistically it is the most used cashless payment method in Japan. According to Japan’s Ministry of Economy, Trade and Industry (METI), credit accounted for 93% of all cashless payments in 2022. This is a big jump from 2016, when only 53.9% of all cashless transactions were made by credit card.

If a store accepts any form of electronic payment, credit cards are likely on that list. That being said, you will still come across small stores that do not accept cards due to high transaction fees. For these cases, it is good to have cash on hand or balance on a transportation card (discussed below).

Another drawback to credit cards: You generally won’t be able to pay with your foreign credit card using Apple Wallet or Google Wallet. This is because most contactless payments in Japan work through Sony’s FeliCa IC chip, a local invention with limited support outside of Japan and some other Asian countries.

An increasing number of stores support contactless credit card payment via the physical card’s IC chip. However, this is a hit and miss.

Please note that you can Pay with Apple Pay or Google Pay using a supported local payment method. I’ll talk about that below.

Transport IC card

Contactless payment with IC card
Image: yosan/PIXTA (ピクスタ)

They are more than a simple method to get on the subway or bus. Japan transportation IC cards (PASMO, Suica, ICOCA, TOICA, etc.) are also accepted as a payment method at more than 2.26 million locations throughout Japan. This includes all major supermarket and convenience store chains and many restaurants.

What’s more, this is one of the easiest options to use for people who want to tap and go. You can add a virtual IC card directly to our Apple Pay or Google Wallet and load it using a credit card in your wallet. To pay, simply tap your card, like any other Apple Pay or Google Wallet payment.

However, there are some clear disadvantages to using your IC card as your primary payment method, especially if you are a resident and not just a tourist.

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