Japan Consumers Slow To Embrace Digital Payments

Japan may have a lot of tech-savvy consumers, but when it comes to payments, they haven’t embraced the new way of purchasing things.

According to a report, which cited a study by Meiji Yasuda this past August looking at payment methods of Japan’s internet users in physical stores, close to 70 percent of consumers across every age group used cash mainly when purchasing something. The study found that it was more than double the percentage of Japanese internet users who typically pay via a digital payment method.

“This hesitant embrace of digital payments has come up in previous investigations of Japanese transaction habits,” according to the report. The report pointed to a study conducted in March that found that credit cards were the most preferred payment method chosen by 80.7 percent of the survey respondents. Other payment methods, such as cash on delivery, were also popular, beating out digital payment services, which were were chosen by 6.9 percent of participants in the survey.

The report noted that the lack of consumers in Japan using digital payments could be because consumers in Japan have real concerns about security.

While consumers in Japan may not be willing to embrace digital payments, the government is. The Japanese government has pushed a number of initiatives to encourage electronic payments. As part of its Regional Revitalization policy rolled out in June 2014, the government urged banks to enhance the scope of domestic automatic teller machines (ATMs) to make them compatible with overseas-issued cards due to a rise in inbound foreign tourists. In Jan. 2016, the Ministry of Economy, Trade and Industry announced plans to launch a mobile payment app for foreign visitors. Consumers can register passport and credit card details in the app and make payments at retail outlets by mobile phone. The app is expected to reduce the problem of non-acceptance of foreign-issued cards for visitors.



B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

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