Japan is historically known as a country where cash is essential. In an article by Statista, Japan is ranked 3rd among countries that rely on cash payment.1 The article even described Japan as an outlier among Asian countries that have aggressively pushed for cashless adoption.
But how has the situation changed in recent years?
As at 2022, according to Japan’s Ministry of Economy, Trade and Industry (METI), the cashless payment ratio has risen to 36.0% (111 trillion yen). From 2016 to 2022, overall household consumption and cashless payment have increased at a CAGR of 0.5% and 10.8% respectively. Therefore, assuming the aforementioned growth rates, Japan is likely to achieve its 2025 “Cashless Vision” target of 40% cashless payment (see Figure 1).
Figure 1: Time series trend of Japan’s cashless payment ratio from 2016 to 2022 & comparison with national target
Source: “2022 Ratio of Cashless Payment Among the Total Amount Paid by Consumers Calculated” (METI) 2
In the same METI web publication, credit card remains to be the top cashless payment mode at 30.4% (93.8 trillion yen). The next highest mode is code payment at 2.6% (7.9 trillion yen), which has overtaken both debit card and electronic money adoption rates for the first time (see Figure 2).
Figure 2: Time series trend of cashless payment modes from 2018 to 2022 (unit: trillion yen)
Source: “2022 Ratio of Cashless Payment Among the Total Amount Paid by Consumers Calculated” (METI) 2
While credit card will remain as the main cashless payment mode, we can also expect Japan to use more code payment in the near future.
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Sources
- Statista. “Where Cash is Still King”. Retrieved from: https://www.statista.com/chart/19868/share-of-cash-payments-in-different-countries/
- METI. “2022 Ratio of Cashless Payment Among the Total Amount Paid by Consumers Calculated”. Retrieved from: https://www.meti.go.jp/english/press/2023/0406_002.html
