Credit card payments are the most widely adopted payment method in Japan. Credit cards are used for payments at physical stores (e.g., restaurants and convenience stores) and online stores and for buying subscriptions. The number of cardholders is expected to continue growing in the future.

The versatility of credit cards for everyday payments is widely recognized, but many customers still have concerns about their security. Given how frequently credit card fraud occurs, the Japanese government is working to improve payment security by developing various guidelines, including the mandatory implementation of 3D Secure 2.0.

In this article, we explain credit card payment security, including fraudulent transactions in Japan, risks associated with card payments, and security measures businesses and cardholders should implement.

What’s in this article?

• Fraudulent credit card transactions in Japan
  
• Risks associated with credit card payments
  
• Credit card security measures for businesses
  
• Credit card security measures for cardholders
  
• How Stripe Radar can help
  

Fraudulent credit card transactions in Japan

According to the Japan Credit Association, the amount of credit card fraud losses that occurred from January–December 2025 exceeded ¥‎51 billion. This figure has more than doubled from the ¥‎25.3 billion in losses incurred in 2020.

As each year passes, fraud schemes become increasingly complex. While completely preventing fraud is almost impossible, it is important for businesses and customers to consider credit card security. Therefore, businesses should comply with the latest version of the Credit Card Security Guidelines and implement all possible security measures. This can help protect customers, ensure legal compliance, and maintain the reputation and credibility of businesses.

In the event of a data breach or unauthorized access, the consequences could extend beyond the loss of customers to the financial burden of chargebacks. Fraudulent activity could also lead to more serious situations, such as regulatory intervention or claims for damages.

Risks associated with credit card payments

The damage caused by credit card fraud grows more severe every year. What are the risks of using credit cards? Below, we explain some of the current methods of credit card fraud.

Phishing scams

In phishing scams, fraudulent actors impersonate credit card companies, banks, online retailers, or government agencies. They send emails that appear to come from trustworthy sources to lure recipients to fake websites. Then, they steal account passwords and credit card information. While phishing scams originated with email, they now use text messages and social media messaging as well.

In these scams, the messages are crafted to look like they are from legitimate organizations. They often include official logos and designs to trick recipients into believing they are genuine. The body of the message will often make clever use of psychological tactics, with phrases such as, “Get 1,000 points as part of our current campaign.” These are crafted to make recipients want to click the links.

In recent years, certain scams have increased, with fake links and other malicious content spreading from customer accounts after they’ve been hijacked via social media or email. In these cases, victims can be unwittingly involved in the phishing scam, so extra caution is necessary.

Skimming

Skimming involves using a device called a “skimmer” to read and steal information recorded on a credit card’s magnetic stripe. A common tactic involves installing skimmers in the card slots of payment terminals at gas stations, self-checkout counters, or automated teller machines (ATMs). Customers insert their credit cards into the skimmers without realizing it. The skimmers read the credit card information and use it to create counterfeit cards or make unauthorized purchases.

Contactless skimming has also appeared in recent years. These scams involve fraudulent actors visiting crowded places with skimmers that read and steal card information without touching the cards. Because the physical cards haven’t been stolen, cardholders might be unaware the unauthorized charges are accumulating.

Credit master attacks

Credit master attacks exploit credit card numbers’ numerical patterns to illegally obtain card numbers. Fraudulent actors use programs or software to automatically generate numbers and identify valid card numbers, security codes, and other details. In other words, this scam works by generating a vast quantity of card numbers using a machine rather than a person. Then, the data is used to generate a large number of random attacks.

Fraudulent actors typically use the payment pages on donation and ecommerce sites to verify the validity of generated numbers. Once a card number is verified, fraudulent actors can make purchases across many ecommerce sites.

Information leaks

Leaks of personal information from unauthorized external access is another risk of credit card payments that ecommerce businesses should monitor. If a leak occurs due to inadequate security measures, it can lead to serious consequences, such as paying substantial damages and reparations. Therefore, it is important for businesses to implement rigorous security measures and manage information appropriately.

Credit card theft

Theft of physical cards is another risk. Even if customers believe they are in safe locations, they could become victims of theft. Therefore, it is important for cardholders to secure their wallets and purses and stay vigilant at all times.

Credit card security measures for businesses

To deter fraudulent actors, it is important to strengthen ecommerce site security. This includes establishing systems capable of addressing all types of fraud. Below, we explain security measures that businesses can implement to help make credit card payments more secure.

Security codes

Similar to chargebacks, credit card security codes serve to protect cardholders by preventing unauthorized use of credit cards by third parties.

When a customer chooses to pay by credit card when purchasing an item on an ecommerce site, they often must enter a security code. Entering this code verifies that they are in physical possession of the card while making the payment. The transaction can only be completed if the security code is correct.

Unlike the card number and expiration date, the security code is not stored on the card’s magnetic stripe. This means that unauthorized use is impossible without the code, even if the cardholder’s name, card number, and expiration date are stolen.

However, entering a security code is not a legal requirement. As a result, some ecommerce sites don’t ask for security codes at checkout. Creating a secure payment environment helps ensure that customers continue to use an ecommerce site. Requiring a security code is an easy way for businesses to do this.

3D Secure 2.0

3D Secure 2.0 (also known as “EMV 3-D Secure”) is a global identity verification service used by international card brands. It is designed to prevent fraudulent activities such as identity theft and enhance credit card security.

3D Secure 2.0 is an enhanced version of 3D Secure 1.0, which was discontinued in October 2022. It employs “risk-based authentication” by assessing detailed information such as the customer’s device details, access location, and time of purchase. This can prevent card information theft before it occurs.

If the risk level is low, additional authentication is not required. On the other hand, if the risk level is high, additional authentication is typically performed using methods such as one-time passwords (OTPs) or biometric authentication.

Fraud detection systems

To create a website environment where customers can shop with peace of mind, it is important to implement a fraud detection system provided by a payment agent. Fraud detection systems can effectively prevent damage to an ecommerce site by detecting and automatically blocking various fraudulent transactions.

For example, fraud prevention tools—such as Stripe Radar—can adapt to changing fraud patterns through machine learning. This allows them to employ the most up-to-date and advanced fraud prevention measures. Furthermore, by using these external tools, businesses do not need to develop and build their own fraud prevention systems. This makes it possible to implement fraud prevention measures without having to spend significant time or incur more costs.

Link payments

Link payments via page redirects involve transactions that take place on payment pages managed by payment agents, rather than on the ecommerce site itself.

Customers click the payment link and are redirected to a payment screen where they enter the required information, such as their name and credit card number. Credit card information is stored only on the payment agent’s server. In other words, the ecommerce site does not retain any card information. This method can help reduce the burden of managing data and provide superior security.

Credit card security measures for cardholders

To avoid becoming a victim of fraud, it’s important for cardholders to handle their cards responsibly.

Check card statements

If you check your statement regularly, you will be more likely to notice payments you don’t remember making. For example, compared to someone who checks their statement once a month, someone who checks their statement after every transaction will be better able to notice unfamiliar payments.

Use notification services

These services allow you to receive notifications by email, short message service (SMS), or app when a payment is made by credit card. With a usage notification service, you receive real-time notifications of the amount, date, time, and store name after each transaction. If you receive a payment notification when you haven’t used your credit card, you can immediately detect fraudulent use and take appropriate action.

Set up two-factor authentication

For added security, set up two-factor or biometric authentication and OTPs, in addition to having a strong, fixed password. OTPs are valid for single use. Therefore, if your card information is compromised by a third party, the OTP remains unknown. This can help prevent unauthorized use. In addition, they expire quickly—typically 30–60 seconds for an app or 5–10 minutes via email or text message. Thus, they are difficult to use for fraud.

However, if your email account is compromised or your smartphone is stolen, your OTP could be exposed. Therefore, it is still important to manage these credentials responsibly.

Protect payments in public

When shopping online while away from home, monitor the people around you, and make sure they don’t peek at your computer or phone screen. Try to avoid using your devices while in large crowds, and don’t shop online while connected to free public Wi-Fi.

It is also important to protect your physical cards. Stay vigilant against pickpockets and theft of unattended items, and never leave wallets or bags unattended if they contain your credit cards.

How Stripe Radar can help

Stripe Radar uses AI models to detect and prevent fraud, trained on data from Stripe’s global network. It continuously updates these models based on the latest fraud trends, protecting your business as fraud evolves.

Stripe also offers Radar for Fraud Teams, which allows users to add custom rules addressing fraud scenarios specific to their businesses and access advanced fraud insights.

Radar can help your business:

• Prevent fraud losses: Stripe processes over $1 trillion in payments annually. This scale uniquely enables Radar to accurately detect and prevent fraud, saving you money.

• Increase revenue: Radar’s AI models are trained on actual dispute data, customer information, browsing data, and more. This enables Radar to identify risky transactions and reduce false positives, boosting your revenue.

• Save time: Radar is built into Stripe and requires zero lines of code to set up. You can also monitor your fraud performance, write rules, and more in a single platform, increasing efficiency.

Learn more about Stripe Radar, or get started today.