It has become increasingly common for businesses operating an ecommerce site to integrate payment functionality into their website. Implementing an online payment system allows the entire process—from the sale of products and services to payment—to be completed online. This can enhance customer convenience as well as expand sales opportunities for the business.

However, it’s important to note that usability and ease of operation can vary significantly depending on the type of payment method and the system you choose.

In this article, we’ll explain the basics of online payment systems, the benefits of implementing them, the payment methods commonly used in Japan, and how to integrate them into your website.

Key takeaways

• Implementing an online payment system allows the entire purchase process—from sales to payment—to be completed online.
  
• While credit card payments are the most common online payment method in Japan, unique payment methods such as konbini (convenience store) payments and carrier billing are also widely used.
  
• Offering multiple payment methods can help reduce cart abandonment and improve customer convenience.
  
• Payment systems vary in terms of the payment methods they support and their ease of use; it’s important to choose one that best fits your business needs.
  
• Integrating payment functionality into a website is relatively easy using an online payment service provider (PSP).
  

What is an online payment system?

An online payment system enables secure payments over the Internet using credit cards, electronic money (e-money), and other methods. While the term online payments seems straightforward, it actually encompasses a wide range of payment methods, and it’s impractical for a business to try to manage each one individually. Implementing an online payment system allows you to centrally manage multiple payment methods, significantly reducing the burden on day-to-day operations.

Benefits of implementing an online payment system

Implementing an online payment system offers a range of benefits, such as increased sales and improved operational efficiency. The main benefits include:

Operational efficiency, even with a small staff

Implementing an online payment system reduces the need for manual verification and data entry, making it easier to operate efficiently, even with a small staff. In addition, because it makes it easier to centrally track payment status and sales data, which were previously managed separately, the administrative back-office work can be reduced. Another benefit is that reducing manual data entry and verification tasks makes it easier to prevent verification errors and data entry mistakes.

Fewer lost sales opportunities

By implementing an online payment system, it becomes easier to offer payment methods that were previously difficult to support. As a result, it becomes easier to reach customers who had previously decided not to make a purchase because their preferred payment method was unavailable. This increased customer convenience can help expand sales opportunities.

In addition, by supporting Apple Pay, Google Pay, and QR code payments, the checkout process becomes smoother for smartphone users, which can help reduce cart abandonment and improve customer satisfaction.

Easier overseas sales expansion

For Japanese businesses looking to expand into overseas sales, supporting the payment methods used in overseas markets is a key consideration. When you’re targeting multiple countries or regions, you’ll need to support different currencies and languages as well. Using an online payment system makes it easier to support these new needs and lower the barriers to cross-border ecommerce.

Common payment methods for online purchases in Japan

According to the Ministry of Internal Affairs and Communications’ 2024 Survey on Communication Usage Trends (Household Edition), while credit card payments are the most common payment method for online purchases in Japan, e-money, QR code payments, and convenience store (konbini) payments are also widely used.

Credit card payments

Credit card payments are the most widely used payment method for online purchases in Japan. This payment method has broad popularity across all age groups and is the standard payment method on many ecommerce sites. It works well for high-value purchases and subscriptions, making it one of the top-priority payment methods that online retailers should support.

In Japan, commonly accepted cards include, but are not limited to, Visa, Mastercard, JCB, and American Express. If you’re considering expanding into international markets, you should also consider accepting payment from card brands that are commonly used in the regions where you plan to sell. These might include UnionPay, Discover, and Diners Club.

E-money and QR code payments

E-money and QR code payments are methods that allow you to pay using a smartphone or a dedicated app. For example, there are e-money systems such as Suica, which was originally used for paying transit fares, as well as QR code payment services such as PayPay, Rakuten Pay, and dBarai (also known as d Payment). Among these, PayPay is widely used in Japan, as it not only allows users to make purchases at stores but can also be used for bill payments for certain local governments.

Convenience store (konbini) payments

Konbini payments are a method that is particularly well-suited to customers who don’t use credit cards. Providing convenient 24-hour service, convenience stores (known colloquially as konbini) can be found all over Japan.

With prepaid convenience store payments, the customer selects the konbini payment option when making an online purchase, and then pays the amount at a convenience store using the confirmation number or barcode provided. The system can be configured so that products are shipped only after payment has been confirmed, minimizing the risk of unpaid orders.

Bank transfers

Bank transfers are a payment method used not only by individual customers but also for business transactions. By supporting transfers via online banking, customers can complete the entire process, from purchase to payment, online.

Bank transfers are often preferred for B2B transactions. They’re also a suitable payment method for users who don’t have credit cards, or for transactions involving high-value items. By using an online payment system, you can automate payment confirmation and streamline status management, helping to improve the operational efficiency of your business.

Carrier billing

Carrier billing is a method where the purchase amount is added to the customer’s mobile phone bill or internet service provider bill. One of its key features is that credit card information doesn’t have to be entered, making it easy to use on smartphones. It’s particularly well-suited for the purchase of low-cost items and digital content, and demand for it remains steady.

Cash on delivery

Cash on delivery (COD) is a payment method where the customer pays for the item when they physically receive it. Since there’s no need to enter payment information online, some users feel this method offers a higher level of security.

For businesses, however, there is a risk that products will be returned if the customer refuses delivery or is away from home for an extended period of time after placing an order. This is a particular concern with international shipping, where return costs can be substantial—to the point where, in some cases, businesses might have no choice but to abandon the products.

Although the use of COD as a payment method has been declining in recent years, there could still be demand for it depending on the product or customer base. If your target customer group is already comfortable using credit cards and online payment methods, those payment options might be sufficient and COD can be skipped. However, if this is not the case, keeping COD as an option is one way to ensure you don’t miss out on sales opportunities.

Types of online payment systems and how to choose one

There are a variety of online payment systems, and each has its pros and cons. Therefore, it’s important to choose the system that best fits your company’s specific business model.

For both in-person and online payments

If you sell both in-store and online, a system that allows you to centrally manage sales, inventory, and customer information is ideal. This kind of system is particularly well-suited for businesses using an online-merge-offline (OMO) strategy, as well as for those that want to integrate multiple sales channels in an omnichannel strategy.

For ecommerce sites

For ecommerce sites, it’s convenient if the payment system can integrate seamlessly with the shopping cart and checkout process. In addition, even if you don’t have dedicated product pages, some services support payment links, which allow you to generate links to accept payments, offering flexible options depending on your needs.

For compatibility with your own services and apps

When integrating payment functionality into your own services or apps, a system that can be flexibly customized via API integration is the best choice.

For recurring billing

If you handle monthly billing or recurring purchases, a system that supports subscription management is a must. In addition to automating billing and renewals, such a system simplifies plan changes and cancellations, which can help reduce operational workload.

How to integrate payment functionality into your website

By building a website with payment functionality that allows customers to complete their purchases right on your site, you can streamline the entire sales process. Let’s take a look at exactly how to add payment functionality to your website.

Register with a payment service provider

First, choose an online payment service provider (PSP) that aligns with your company’s business model and operational methods. Compare the supported payment methods, fees, and setup procedures to select the service that best suits your needs, and then create an account. When registering for an account, you’ll typically need to enter your business information, verify your identity, and set up a bank account for receiving sales proceeds. Depending on the payment service provider, the review process can take some time, so it’s advisable to begin your preparations well in advance.

Set up payment functionality on your website

Once your account is set up, the next step is integrating payment functionality into your website. Options for doing so include issuing a payment link to accept payments or embedding a payment form on your site. It’s important to choose the method that fits your company’s operational processes and website structure, and that can be implemented easily.

Conduct tests

After integrating a payment system into your website, be sure to test it thoroughly before going live. By using a test environment to verify the payment flow, you can check in advance whether payments are processed correctly and ensure there are no issues with notifications or how screens display.

How Stripe Checkout can help

Stripe Checkout is a fully customizable prebuilt payment form that makes it easy for you to accept payments on your website or application.

Checkout can help you:

• Increase conversion: Checkout’s mobile-optimized design and one-click checkout flow make it simple for customers to input and reuse their payment information.

• Reduce development time: Embed Checkout directly into your site, or direct customers to a Stripe-hosted page, with just a few lines of code.

• Improve security: Checkout handles sensitive card data, simplifying PCI compliance.

• Expand globally: Localize pricing in 100+ currencies with Adaptive Pricing, which supports 30+ languages and dynamically displays the payment methods most likely to improve conversion.

• Use advanced features: Integrate Checkout with other Stripe products, such as Billing for subscriptions, Radar for fraud prevention, and more.

• Maintain control: Fully customize the checkout experience, including saving payment methods and setting up post-purchase actions.

Learn more about how Checkout can optimize your payment flow, or get started today.