🇯🇵 Payments in Japan

What the official figures actually measure

The cashless payment ratio is the share of transactions, by value, paid with anything other than cash. METI calculates and publishes it for Japan every year. It put the ratio at 58.0% for 2025, on ¥162.7 trillion of transactions. Credit cards alone accounted for 82.7% of that. Barcode payments came next at 10.2%, prepaid e-money at 3.7%, and debit cards at 3.4%. For several years now, these figures have contradicted Japan’s reputation as a country that clings to cash. Three features define the Japanese payments market, and the sections below take them one at a time. Credit cards dominate. Prepaid contactless runs on a technology that imported terminals cannot read. And no bank controls the switching layer.

This split has a direct effect on licensing. A prepaid wallet issuer answers to the FSA, while a card acquirer answers to METI, so the applications go to different places on different timetables. A company that wants to accept cards and also hold customer balances therefore runs two parallel processes, with two agencies that do not coordinate their deadlines. Neither review waits for the other. The launch date depends on the slower of the two, and the gap runs to months.

Zengin: retail credit transfers since 1973

The Zengin System (全銀システム) exchanges and clears retail interbank credit transfers in Japan in near real time. It is run by Zengin-Net (全国銀行資金決済ネットワーク), licensed under the 資金決済法 (Payment Services Act) since September 2010, and nearly every deposit-taking institution in the country takes part. It went live in April 1973, 45 years before it moved to round-the-clock operation and decades before instant payments spread worldwide. In December 2025, it processed about 8.43 million transactions and ¥17.5 trillion per business day, or nearly 2.04 billion transactions over the year. It has run 24/7 since October 2018, through the Zengin More Time System.

Interbank pricing for transfers changed fundamentally in 2021. Until then, the sending bank paid the receiving bank ¥117 for transfers under ¥30,000 and ¥162 above that, a schedule that had not changed in more than 40 years. Zengin-Net abolished it in an announcement on March 18, 2021. Since October 1, 2021, a flat 内国為替制度運営費 (domestic transfer system fee) of ¥62 before tax has applied regardless of amount. It breaks down into ¥50 for processing on the receiving side and ¥12 as a continuity margin. It is up for review every five years. The sending bank pays the ¥62 on every transfer, so any lower customer price is charged at a loss. That fee sets the economic floor for any transfer fee a Japanese customer pays.

Two openings followed the pricing reform. Since 2022, the Zengin System has admitted non-bank funds transfer providers (資金移動業者), under an industry decision taken in September 2022. An API gateway went live on November 25, 2025. For peer-to-peer payments, the major banks set up Cotra (ことら送金) in 2022 in response to the wallets. The service caps each transfer at ¥100,000, is free, and identifies the payee by phone number or email. Cotra reported about ¥2 trillion in cumulative volume in October 2025 and 418 participating institutions in February 2026. Awareness remains low, however, at 28.7%, with a usage rate of 10.2% (MMD Research, October 2025).

The Zengin format: 120 bytes, fixed positions, half-width katakana

The 全銀協規定フォーマット (Zengin standard format) is the file format that carries every bulk transfer, payroll run, bonus payment, and direct debit between a Japanese company and its bank. It uses fixed-length 120-byte records, a legacy of magnetic tape, transmitted over the 全銀協標準通信プロトコル protocol. Each file stacks four record types, identified by their first character: 1 header, 2 data, 8 trailer totals, 9 end. Banks publish their own specifications. Those of Mitsubishi UFJ Trust, Chiba Bank, and Oita Bank match field for field, because the format belongs to the bankers association.

HEADER  (データ区分 = 1)
 pos  type  len  field
   1   N     1   データ区分            "1"
   2   N     2   種別コード            21=総合振込 / 11 or 71=給与 / 12 or 72=賞与 / 91=口座振替
   4   N     1   コード区分            0=JIS, 1=EBCDIC
   5   N    10   委託者コード          assigned by the bank, per contract
  15   C    40   委託者名              HALF-WIDTH KATAKANA
  55   N     4   振込指定日            MMDD (no year)
  59   N     4   仕向金融機関コード     4 digits
  63   C    15   仕向金融機関名         half-width katakana
  78   N     3   仕向支店番号          3 digits
  81   C    15   仕向支店名            half-width katakana
  96   N     1   預金種目(依頼人)      1=普通, 2=当座
  97   N     7   口座番号(依頼人)      right-aligned, zero-padded
 104   C    17   ダミー                spaces

DATA  (one record per payee, データ区分 = 2)
   1   N     1   データ区分            "2"
   2   N     4   被仕向金融機関番号
   6   C    15   被仕向金融機関名       left-aligned, space-padded
  21   N     3   被仕向支店番号
  24   C    15   被仕向支店名
  39   N     4   手形交換所番号        optional (spaces)
  43   N     1   預金種目              1=普通, 2=当座, 4=貯蓄
  44   N     7   口座番号
  51   C    30   受取人名              NAME EXACTLY AS REGISTERED AT THE BANK
  81   N    10   振込金額              WHOLE YEN, right-aligned, zero-padded
  91   N     1   新規コード            optional
  92   N    10   顧客コード1           free-form originator reference
 102   N    10   顧客コード2           free-form originator reference
 112   C     9   ダミー                spaces

TRAILER (データ区分 = 8)  : 合計件数 N(6) + 合計金額 N(12) + ダミー C(101)
END     (データ区分 = 9)  : ダミー C(119)

N = unsigned zoned decimal  ·  C = half-width character
    katakana, Latin capitals and digits only

Japan’s direct debit, 口座振替, uses the same format with type code 91. It differs from European direct debit in where the mandate sits. The mandate is agreed between the debtor and the debtor’s own bank, on a 預金口座振替依頼書 (direct debit authorization form), rather than held by the creditor. This rail carries rent, utilities, subscriptions, and monthly credit card bills. The data record has a 30-character 預金者名 field, a 20-digit 顧客番号 for the creditor’s reference, and a one-digit 振替結果コード that the bank fills in on the return file.

CAFIS, CARDNET, and the authorization network

CAFIS (Credit And Finance Information System) is the network that switches card authorization requests between Japanese points of sale and issuers. Card switching has never been owned by the banks. NTT Data, an IT company with roots in telecoms, has run CAFIS since 1984. It is still the dominant authorization network, and every Japanese card integration goes through it, directly or through an intermediary. NTT Data has built it out into a family of platforms, including CAFIS Arch for newer traffic. The same company also runs the INFOX terminal network, whose FOMA and INS-P line connections shut down on March 31, 2026, a hardware deadline that not every older terminal fleet has met.

The second switch is CARDNET (日本カードネットワーク), a company incorporated on March 16, 1995, not in the 1980s as is often claimed. The industry owns it jointly. Its shareholder list as of June 30, 2025, includes JCB, NTT Data, Mitsubishi UFJ Nicos, TIS, and Sumitomo Mitsui Card, along with AEON Financial Service, Orient Corporation, Credit Saison, Sumitomo Mitsui Trust Club, Jaccs, UCS, Life Card, and two merchant federations. It has ¥480 million in capital and had 380 employees as of March 31, 2025. NTT Data, which runs CAFIS, is thus a shareholder in its own competitor. Each processing center connects to one network or the other. Japanese card routing is therefore split between two switches, and the operator of the first owns a stake in the second.

The rules come from the 割賦販売法 (Installment Sales Act), revised in 2018 and administered by METI. The act created a register of クレジットカード番号等取扱契約締結事業者 (card merchant contracting firms). It lists acquirers, and also the providers that sign up merchants on an issuer’s behalf, which means PSPs. Registration comes with oversight duties: the registered firm must vet its affiliated merchants, fix deficient practices, and, if needed, terminate the contract. The same act requires merchants either not to store card data or to comply with PCI DSS. The 2018 revision made chip terminals the norm nationwide.

JCB, the acquiring chain, and the cost of acceptance

JCB (Japan Credit Bureau) is a Japanese payment card scheme, founded in 1961, that went international in 1981. Apart from UnionPay, it is still the only international card scheme to come out of East Asia. Its 2025–2026 corporate profile claims more than 181 million cardholders and about 71 million merchants in more than 190 countries and territories. Issuing remains concentrated in Asia. Acceptance elsewhere relies largely on a reciprocity agreement with Discover Global Network, so a JCB card used in the US in practice runs over the Discover network. JCB also operates QUICPay, one of Japan’s two proprietary contactless rails.

Japan’s acquiring chain splits card issuing and merchant acquiring between separate companies. Issuing is handled by credit companies backed by banks or retailers, including Sumitomo Mitsui Card, Mitsubishi UFJ Nicos, JCB, Credit Saison, Orient Corporation, AEON Financial Service, Jaccs, and Rakuten Card. Merchants rarely contract with them directly. Instead they go through a PSP, which signs them up under a master agreement with several card companies. GMO Payment Gateway, SB Payment Service, Sony Payment Services, and DG Financial Technology play that role. As a firm registered under the 割賦販売法 (Installment Sales Act), the PSP carries the duty to vet its merchants. A foreign merchant therefore enters the market through a PSP, which in practice is the only counterparty it deals with.

FeliCa, Suica, and the prepaid empire

Contactless payment in Japan runs on FeliCa, a technology developed by Sony, standardized as JIS X 6319-4, and known in the NFC world as Type F (NFC-F). EMV contactless cards use Types A and B instead. FeliCa transmits at 212 or 424 kbit/s, a speed chosen to keep up with the flow of passengers through Tokyo’s subway gates. That transit requirement is what the whole Japanese prepaid ecosystem was built on. A Japanese point-of-sale terminal must therefore handle three radio technologies, A, B, and F, plus barcode scanning.

Prepaid is shrinking but not disappearing. Squeezed between credit cards and barcode payments, it is the only Japanese payment instrument whose volume fell in METI’s 2025 statistics. Two use cases keep it alive, and nothing can replace it in them today. Transit gates need a transaction speed that barcodes cannot match. Small in-person payments also remain prepaid territory, for age groups that credit cards do not reach. A station shop that does not take Suica shuts out commuters, who already use their cards to get through the gates. The November 2025 announcement points the other way: JR East is turning Suica into a general-purpose wallet, with barcode payments and a higher limit.

PayPay, barcode payments, and the JPQR standard

Code payments are in-store payments made by scanning a barcode or QR code, displayed either by the merchant or by the customer on their phone. They totaled ¥16.6 trillion in 2025, or 10.2% of Japanese cashless payments (METI). PayPay, launched in late 2018 by PayPay Corporation (SoftBank / LY Corporation group), dominates the segment. It won the open battle of 2018 to 2025 with a points-rebate campaign more aggressive than anything else in the region. The company listed on Nasdaq on March 12, 2026. For the fiscal year ended March 2026, it reported ¥380.7 billion in operating revenue, up 27%, and 73.4 million registered users. More than 40 million of them have completed electronic identity verification.

The Payments Japan Association (キャッシュレス推進協議会) created JPQR in 2019, at METI’s urging, so merchants would not have to display ten different codes. One code serves several providers, which remain separate behind it. The international extension is JPQR Global. Launched on July 5, 2025, at the Expo 2025 Osaka, Kansai site, it links JPQR to foreign QR standards: first KHQR (Cambodia), then QRIS (Indonesia) from August 17, 2025. Visitors from Southeast Asia can now pay in Japan with their home wallet, for the first time without a private gateway.

Konbini, deferred payment, and paper bills

コンビニ収納代行 (konbini bill payment) lets customers pay a bill that carries a barcode or payment number at a convenience store. The service has existed since 1987. The buyer orders online, then pays cash at the register of a 7-Eleven, FamilyMart, or Lawson. In fiscal 2022, the chains collected 1.09 billion payments worth ¥13 trillion through this channel, according to a document the 日本フランチャイズチェーン協会 (Japan Franchise Association) presented to a working group of the 規制改革推進会議 (Regulatory Reform Promotion Council) on October 9, 2024. Japan’s convenience stores thus form a cash collection network, and the country’s entire deferred payment market rests on it.

The FSA, METI, and the licenses you need

Japanese payments law grants authorizations by function, with no single license covering the whole business. Two agencies share the field. The FSA (金融庁) administers the 資金決済法 (Payment Services Act) and the 銀行法 (Banking Act), with applications reviewed by the Ministry of Finance’s local finance bureaus. METI administers the 割賦販売法 (Installment Sales Act), and therefore credit cards and deferred payment. One company may fall under both, and the initial classification turns on what it does: hold a balance, transfer funds, or sign up merchants on an issuer’s behalf.