Payments in Japan: An in-depth guide


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  1. Introduction
  2. The state of the market
  3. Payment methods
    1. Current usage
    2. Emerging trends
  4. Ease and friction of entry
    1. Taxes
    2. Chargebacks and disputes
    3. International payments
    4. Security and privacy
  5. Key success factors
  6. Key takeaways
    1. Balance innovation with tradition
    2. Reinforce security measures
    3. Build trust among local customers

Expanding your business into Japan means entering one of the world’s largest e-commerce markets, with the business-to-business (B2B) market valued at over ¥420 trillion and the business-to-consumer (B2C) market at ¥22.7 trillion in 2022. However, operating in Japan requires an understanding of local payment preferences, cultural values, and regulations around electronic payments and data protection.

Below, we’ll help businesses that are interested in the Japanese market think through key factors, including:

  • Balancing innovation with tradition
  • Reinforcing security measures
  • Building trust with local customers

The state of the market

Although Japan uses many international payment methods, such as Apple Pay and Google Pay, domestic payment methods are also popular among Japanese customers and businesses. In a blend of traditional banking practices and modern digital payment solutions, Japanese customers still rely heavily on cash but are increasingly adopting contactless payments and digital wallets. This combination in Japan creates unique opportunities and challenges for businesses thinking about expanding into the region.

Japan’s regulatory environment is another defining characteristic of its payment culture, with multiple entities closely supervising Japan’s financial sector. The Financial Services Agency (FSA) oversees financial services including the banking, securities and exchange, and insurance sectors. Meanwhile the Ministry of Economy, Trade and Industry (METI) regulates card payments.

Payment methods

The Japanese payment system contains a diverse array of local payment methods that include established credit card networks and innovative QR code-based platforms. Here’s a look at popular payment methods in Japan:

Current usage

Cash remains deeply ingrained in Japanese society, with Japan’s Ministry of Economy, Trade and Industry reporting that only 36% of payments in 2022 were cashless. Payment methods such as Konbini offer a workaround for people who shop online but prefer to pay in cash, allowing customers to pay for e-commerce purchases in cash at a local convenience store.

The Japanese government has actively promoted cashless payments, particularly as the country receives an increasing number of international tourists. The elderly population in particular exhibits a strong preference for cash. But it’s not just millennials who are keen to use cashless payment methods. According to a 2022 survey, 39% of Japanese consumers in their 50s used cashless payments whenever possible, while 13% reported only using cash.

While cash is still frequently used in day-to-day transactions, credit card usage has consistently grown, especially in sectors such as online shopping, travel, and dining. Credit card transactions increased by almost 13% from 2022 to 2023, reflecting changing consumer payment preferences. Contactless payments have also increased in adoption, especially through local mobile payment apps such as LINE Pay and Rakuten Pay. Between 2024 and 2025, these two payment methods are expected to grow their user base by 8% and 6%, respectively.

  • Bank transfers (i.e. Furikomi)
  • Direct debits
  • Credit cards

Platforms such as PayPay are bringing QR code payments into the mainstream in Japan, allowing customers to make purchases via fast money transfers. The number of active QR code payment services users in Japan increased by nearly 15 million from 2022 to 2023, totaling about 75.6 million. QR code payments even outnumbered preloaded e-money such as transportation cards for the first time in 2022.

In 2017, Japan recognised Bitcoin as a legal form of payment – one of the first countries to do so – and cryptocurrency adoption has increased since then. By 2022, there were around 3.7 million active cryptoasset accounts in Japan, though it’s still not widely used as a form of payment. The FSA mandates that cryptocurrency exchanges register and maintain rigorous security measures, and it has capped the leverage for cryptocurrency margin trading.

Ease and friction of entry

Entering the Japanese market requires strategies for handling everything from collecting tax, to accepting international payments, to fulfilling legal obligations around payment security. Here are a few important factors to consider:


Businesses in Japan are subject to the consumption tax, which is similar to the value-added tax (VAT) in many other countries. As of October 2019, Japan’s consumption tax rate was raised to 10% for most goods and services, with some exceptions such as food items taxed at 8%. While consumers bear the immediate responsibility for paying this tax, businesses must collect and remit it to the government. Japan’s Invoice System allows businesses that pay consumption tax to receive the appropriate purchase tax credit, and Stripe Invoicing can help simplify this invoicing process. Businesses can face penalties if they do not collect and report these amounts accurately.

Chargebacks and disputes

Japan’s approach to chargebacks and disputes is influenced by cultural considerations and specific legislative measures. Japan’s Consumer Contract Act provides consumers with certain protection against fraudulent and unauthorised transactions. If a consumer identifies an unauthorised charge on their account, they can dispute it, and the business must promptly provide evidence of the transaction’s legitimacy.

Japan has a consumer-centric model, similar to many European countries. Businesses operating in Japan should be prepared for this dynamic and recognise the importance of transaction verification, meticulous record-keeping, and prompt responses to disputes. While credit card companies typically manage chargebacks, Japan also has an independent industry body – the Japan Consumer Credit Association – which can be involved in more complex dispute resolutions, along with the Consumer Affairs Agency. In general, Japanese issuers are slower to issue chargebacks compared to issuers in other countries, so while there are typically fewer chargebacks, each one tends to be given more attention.

International payments

The ability to accept cross-border payments is increasingly important for both B2B and B2C sales in Japan, due to the country’s strong tourism industry and deep ties to international markets. Here are key factors to consider around international payments:

  • Global standards
    For international transactions, Japan abides by global standards such as the Basel III framework for banking supervision and follows recommendations from international bodies such as the Financial Action Task Force (FATF) to counter money laundering and terrorism financing.

  • Currency conversion
    Currency conversion in Japan occurs in a variety of scenarios, from large B2B transactions to individual purchases from tourists. Japanese banks and financial institutions use the Tokyo Interbank Offered Rate (TIBOR) as a reference for interbank transactions. Other currency conversion services will use TIBOR as a benchmark, but the conversion rates charged to consumers will often include a markup determined by the service provider. The following banks and financial institutions are major providers of currency conversion services in Japan: Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Nomura.

  • Platforms from emerging markets
    For businesses selling to international tourists visiting Japan or e-commerce customers in other countries, accepting popular payment methods from other markets – such as China’s WeChat Pay – can reduce barriers at checkout.

Security and privacy

Payments in Japan can involve many regulations and compliance protocols. Although these might pose additional hurdles for your business, having strict payment security measures can also strengthen consumer trust in your company. Here are some regulations and industry practices to consider:

  • Payment services laws
    The Instalment Sales Act imposes certain obligations on internet businesses in Japan that accept credit card payments, requiring, for example, the secure management of customer card data. The Payment Services Act, first introduced in 2009, helps regulate electronic money and payment services. It has introduced new standards and regulations for e-money issuers and crypto services.

  • Consumer protection laws
    The Specified Commercial Transactions Act applies to businesses that service consumers and aims to protect consumers by, among other things, prohibiting the misrepresentation of prices and payment conditions.

  • Anti-Money Laundering (AML) laws
    The Act on Prevention of Transfer of Criminal Proceeds was designed to prevent money laundering and the financing of terrorism. It applies to certain financial services, mandates rigorous customer identification processes, and requires that financial institutions report any suspicious transactions to the authorities.

  • Data protection laws
    The Protection of Personal Information Act regulates the use and storage of personal data by businesses, mandating, for example, that companies take necessary measures to prevent data leaks and loss or damage of personal data.

  • Fraud detection technologies
    Tools such as machine learning, a subfield of artificial intelligence (AI), and 3D Secure authentication are increasingly being used to identify real-time patterns and anomalies that indicate fraudulent behaviour. Businesses in Japan are required to enable 3D Secure authentication on online transactions by the end of March 2025.

Key success factors

A combination of tradition, innovation, consumer behaviour, and regulatory oversight shape the Japanese payment system. Despite modernisation in many areas, technological inertia poses challenges in other domains. Setting up a successful business in Japan requires addressing these issues head on. Here’s how to apply a multi-faceted approach:

  • Offer cash-centric payment options
    Despite the global trend of adopting cashless transactions, Japan remains reliant on cash. Cash transactions still constituted about 64% of payments in 2022. Accepting cash for in-person purchases and Konbini payments for online transactions can help businesses close sales with customers averse to digital payment options.

  • Build consumer trust
    Japanese culture places a high value on trust and reputation. Providing high-quality Japanese translation on your website, addressing any payment disputes quickly, and offering phenomenal customer service can improve your business’s reputation and help you gain customer loyalty over time.

  • Implement strict regulatory compliance
    Businesses that adhere to Japan’s specific regulations, such as the Protection of Personal Information Act and the Specified Commercial Transactions Act, as applicable, demonstrate a commitment to lawful operations while boosting customer trust, too.

  • Maintain up-to-date security practices
    Several high-profile cybersecurity breaches have affected Japanese payment systems, and the National Police Agency reported that cybercrimes hit an all-time high in 2022 – specifically, ransomware attacks. Continual updates to security protocols can mitigate fraud and cybercrime risks.

Key takeaways

Accommodating traditional payment preferences, bolstering payment and data security protocols, and adapting each aspect of your payment system to local customers are important aspects to consider when expanding your business into Japan. Here’s a recap of how to shape your strategic vision in Japan:

Balance innovation with tradition

  • Support a cash-reliant customer base
    Despite the global shift to digital payments, many Japanese consumers still prefer cash. To reflect this preference, include a Konbini option for online purchases.

  • Optimise the mobile payment process
    As the volume of smartphone purchases grows in Japan, optimise the mobile payment experience for e-commerce sales and incorporate digital wallet payments as an option at checkout.

  • Use QR codes
    Use QR codes for quick, contactless checkouts through popular payment platforms such as PayPay.

Reinforce security measures

  • Prioritise data protection
    Adhere to Japanese data privacy regulations such as the Protection of Personal Information Act, implement secure payment gateways, and ensure Payment Card Industry Data Security Standard (PCI DSS) compliance.

  • Implement ransomware guardrails
    Regularly back up important files, integrate internet security gateways, and enable multifactor authentication throughout your company.

  • Detect and prevent payment fraud whenever possible
    Employ fraud detection tools, apply 3D Secure authentication for online transactions, and provide clear reporting channels for suspicious activity.

Build trust among local customers

  • Integrate with domestic payment methods
    Partner with prominent domestic payment platforms such as PayPay and LINE Pay to make transactions more convenient for local customers.

  • Provide a localised online interface
    To build trust and provide an easy checkout experience for Japanese customers, use a payment interface that’s available in Japanese.

  • Focus on customer support
    In Japan, a strong emphasis on hospitality means exceptional customer service is even more important than usual. Make real-time support available, especially during payment processes.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practice in your jurisdiction for advice on your particular situation.

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