Common Online Shopping Payment Methods in Japan

Online shopping has rapidly gained popularity in Japan in recent years, and demand for cashless payments has been growing. According to figures from the Ministry of Economy, Trade and Industry, the size of the ecommerce market for customer-facing transactions in the country in 2024 was ¥26.1 trillion, a 5.1% increase from the previous year’s figure of ¥24.8 trillion. In particular, credit card payments account for roughly 80% of all transactions on ecommerce sites, underscoring their importance.

This article will introduce the most common payment methods used by online stores, explain the advantages and disadvantages of each one, and discuss key considerations for ecommerce businesses when implementing them.

Key takeaways

Common payment methods used by online stores include credit cards, e-money, and convenience store (Konbini) payments.
Each payment method has its own advantages and disadvantages.
When choosing ways to pay for an online store, it’s important first to understand your customers’ payment needs and then determine which methods to prioritize.
Because Stripe Payments supports a wide range of payment needs, you can simplify your online payment processes and create a secure and user-friendly website.

List of payment methods used in online stores

To maintain a high conversion rate on an online store, offering multiple ways to pay is valuable. For this reason, businesses need to thoroughly understand the various payment methods commonly used in shopping on the web and identify and implement those best suited to their business.

The following is a list of payment methods available on ecommerce sites in Japan, along with how often they’re used, based on a survey by the Ministry of Internal Affairs and Communications (multiple responses allowed). We can see card payments account for about 80% of the total, followed by e-money and convenience store payments, which together account for over 30%.

Credit card payments: 79.8%
E-money payments: 43.5%
Konbini payments: 33.7%
Payment at bank or post office counters and ATMs: 23%
Internet banking: 23%
Carrier payments: 16.3%
Cash on delivery (COD): 16.1%

Looking at this data, we see that it is important to make sure that those top three payment methods, starting with credit cards, as well as others, ensure that sales opportunities aren’t lost. Still, if the customer base includes many older customers, providing options such as bank transfers and COD can improve customer satisfaction and increase revenue.

Advantages and disadvantages of each payment method

Let’s take a closer look at the specific pros and cons of each method from both the business and user perspectives.

Credit card payments

Credit card payments boast a high usage rate. Many users appreciate that certain cards offer high rewards rates on points and miles, as well as flexible payment options such as installment, revolving, and bonus payments.

Credit card payments	Business owners	Users
Advantages	Easy to use for high-value items, can lead to increased average sales price Smoother sales and customer service for international visitors to Japan Easily expands sales opportunities	No need for cash Can earn reward points Can use various repayment methods such as installments, revolving credit, and bonus payment
Disadvantages and points to note	Payment processing fees are incurred Security measures such as fraud detection systems must be put in place There’s a time lag before the payout is received	Might overspend Interest costs increase significantly when payment period is extended Risk of fraud

E-money payments

E-money payments use digital data representing money instead of cash. There are actually three different types:

Advance payment (prepaid methods): User loads funds into the e-money account in advance.
Immediate payment (debit): The e-money connects directly to a bank account.
Postpayment (postpaid methods, such as buy now, pay later): The e-money links to a credit card.

	Business owners	Users
Advantages	Payment is finalized at the time of order, which helps mitigate the risk of nonpayment Can attract customers who are hesitant to provide their credit card information	No need for cash This method can also earn loyalty points or rewards Prepaid type helps avoid overspending
Disadvantages and points to note	The payout cycle after payment varies depending on the payment service, and it could take some time for the funds to be deposited The prepaid type is rarely used for high-value products Insufficient account balance can sometimes lead to cart abandonment	Refunds could take some time to process depending on the payment service For the prepaid and debit types, insufficient balance blocks use, so funds must be loaded to the account in advance

Convenience store payments

Users can make Konbini payments at convenience stores across Japan 24 hours a day, 365 days a year, making them a highly convenient way to pay.

	Business owners	Users
Advantages	Appeals to a wide range of customers Deposit can be confirmed about 1 hour after payment completion By adopting a prepaid system, products are shipped only after payment is confirmed, which completely avoids the risk of nonpayment	Can be used by people who don’t have a credit card or use e-money Payments can be made anywhere, anytime as long as there’s a convenience store nearby
Disadvantages and points to note	If payment is not received by the due date, the order will be automatically canceled and will not be counted as revenue As a general rule, the maximum payment amount per transaction is ¥300,000 (including tax); transactions for products or services that exceed this amount aren’t supported	Feels cumbersome if there are no convenience stores nearby Have to be careful not to miss the payment deadline or lose the payment slip

Bank transfers

People of all ages have used bank transfers as a popular payment method for online shopping for many years. In the past, customers had to visit a branch or ATM to send funds to the bank account specified by the web store. Now, internet banking, which allows transfers via computer or smartphone, has recently become more widely adopted.

	Business owners	Users
Advantages	No risk of nonpayment Appeals to a wide range of customers If a payment service provider is used, reconciliation work can be reduced	In most cases, no transfer fee is charged if the bank is the same Anyone who has a bank account can use this method Strong sense of security because these transactions are conducted directly between banks
Disadvantages and points to note	If payment is not received by the due date, the product can’t be shipped and the order might have to be cancelled If you enter into a direct contract with a bank, tracking and verifying deposits can be time-consuming	As a general rule, you are responsible for any transfer fees If the user isn’t familiar with online banking, they will have to go to a bank or ATM Because the product is shipped after payment is confirmed, it could take some time for the product to arrive

Carrier payments

Carrier payment is a service provided by major mobile carriers such as NTT DOCOMO, au, and SoftBank. When you purchase items with carrier payment, the charge is added directly to your mobile phone bill, eliminating the need for a separate checkout step.

	Business owners	Users
Advantages	Attractive to younger people who are frequent smartphone users Saves the hassle of collecting payments Reduces the risk of nonpayment	You can pay for goods and services by adding the charges to your mobile phone bill You can purchase items without needing a credit card
Disadvantages and points to note	Because there are limits on how much can be spent, it is not suitable for large transactions Specifications and systems vary by carrier, making management cumbersome	Only lump sum payments are available There’s a limit on how much can be spent

Cash on delivery

Like bank transfers, cash on delivery has been a popular payment method among many users ever since online shopping became widespread in Japan, and it remains a common option to this day. With COD, where the delivery company collects payment upon delivery, cash is the standard way to pay, though credit cards are sometimes accepted as well.

	Business owners	Users
Advantages	There’s no need to verify payment, so orders can be shipped immediately after they’re received Ensures that payment is properly collected Because the delivery carrier handles billing on your behalf, you can save time on collecting payments This method is appealing to both older adults and younger people who are hesitant to use credit cards	Can be used by anyone Products are received as soon as you pay, so there are no worries about lost shipments
Disadvantages and points to note	If a customer refuses to accept a delivery, your company pays the cost of returning the item There’s a time lag before the payout is received	You must have cash on hand to pay Someone must be present at the delivery address to pay for and receive the item Can’t be left at the door or in a delivery box

Key considerations when implementing payment methods for an online store

When implementing payment methods for an online store, there are a few major points to keep in mind.

It’s common to use a payment service provider to help with this implementation process—the benefits include simplifying the setup process and making the preparations required to start an online shop run more smoothly.

However, the services offered vary by provider, and some of the ways you want to pay might not be available. For this reason, businesses need to first identify the payment methods you want to prioritize and clearly define the specific services your company requires.

Offering multiple payment methods helps prevent cart abandonment

The most valuable factor when implementing payment methods is offering widely used options that meet shoppers’ needs. While credit card payments, the predominant way to pay, are central, providing a combination of other ways to pay allows you to attract a broader customer base and helps prevent cart abandonment.

Take security into account

Security measures are foundational for maintaining customer trust and preventing financial losses caused by unauthorized activity. In particular, the losses from credit card fraud continue to increase each year. Therefore, it’s no exaggeration to say that establishing a framework capable of addressing all forms of misuse and enhancing the security of credit card payments needs to be the top priority for all businesses processing card transactions.

That said, it’s extremely difficult for a company to manage its own security systems and prevent 100% of fraud, which becomes more sophisticated every single year. As a result, the most effective solution recommended is the fraud detection and prevention tools provided by payment providers as part of their services. By using these tools, you can build a highly secure website environment without having to invest significant time or money into developing proprietary prevention systems.

Can it be used for cross-border ecommerce?

If you want to expand your cross-border ecommerce business to those outside of Japan, you’ll need to incorporate local payment methods that users in those regions typically use. For example, if the goal is to launch a cross-border ecommerce business targeting the United States, it’s useful to check which ways to pay are available and widely used there.

When integrating checkout services for a target country, it’s common practice to work with a payment service provider that supports major international payment methods and operates on a global scale, rather than entering into individual, direct contracts with one or more processors in that country. For instance, if you use a payment service provider such as Stripe with support for multiple currencies and languages, you can implement all the necessary checkout options at once and offer online payments in the customer’s own language based on their browser settings.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

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Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.
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Learn more about how Stripe Payments can power your online and in-person payments, or get started today.

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