Best Cashless Payment Options in Japan

The Cashless Payment Situation in Japan

Following a successful 9 months, June 2020 saw the conclusion of a cashback scheme implemented by the Japanese government back in 2019 in a bid to expand the number of locations where cashless alternatives are accepted. While credit cards account for nearly 90% of cashless payments, thanks to the cashless scheme, there are now over 1 million stores across the country accepting newer cashless methods such as virtual commuter passes and QR codes. What's more, according to research by the Mainichi Shimbun, it's estimated that over half of people in Japan under the age of 50 are now using some form of cashless payment in their lives! Looking ahead, the Japanese government hopes to see cashless payments account for 40% of the payments by 2025, and it's hoped that this number will rise to 80% in the near future.

Why You Should Go Cashless in Japan: The Benefits of Cashless Payment

Going cashless in Japan rewards consumers in two ways. Firstly, there's the convenience of being able to pay simply by swiping a card or scanning a QR code, which will save you time while avoiding the hassle of accumulating small change in your pocket. Travel cards are especially demonstrative of this convenience as they make navigating stations a breeze, all the while being able to pay for a range of goods in and around Japan's major transport hubs. 

The majority of cashless payment methods in Japan also come with a reward scheme that returns a percentage of the money you spend as points, which can then be exchanged into yen when making a future purchase in order to reduce the total cost you pay.

Cashless Payment Options for Short-Term Visitors

Credit Cards

Understandably, the easiest cashless solution for those visiting Japan on holiday is to bring their credit card from overseas. While this isn't recommended for those visiting the countryside, where many locations still only take cash, their usability in major cities such as Tokyo is much greater.

Although it's always recommended to check with your issuer whether your card can be used in Japan, owners of a MasterCard or VISA will be able to use them to pay at many chain stores and at most hotels and ryokan (inns). To be certain, keep an eye out for your card's respective logo at the storefront.

Of course, you can also use your card to withdraw hard cash from ATMs and, thanks to the existence of convenience stores, you can do this almost anywhere during your travels. Again, VISA and MasterCard are the safest choice when it comes to compatibility with Japanese ATMs, but in addition to this, many other cards function with ATMs marked with the PLUS logo. These are typically found in 7-Elevens and branches of the Japan Post Bank.

IC Cards

For those looking to maximize the convenience of cashless payments, Japan's commuter cards, known commonly as "IC cards," are the undisputed champions. While they already make it a smooth process to navigate Japan's public transport system, they also make it possible to pay for a wide range of things in and around most stations, from vending machines and restaurants to high-end shopping, such as at Ikebukuro's Sunshine City and AEON malls nationwide. You can even use these cards at any of the major convenience store chains (Lawson, FamilyMart, and 7-Eleven) as well as less common ones like Daily Yamazaki and Ministop.

These cards are also incredibly easy to get your hands on – head to a ticket machine or counter in any station and pay a small deposit (normally 500 yen) plus an amount to charge the card with at the start, and then you'll be all set up to get swiping with your new IC card.

The most recognizable and commonly used IC card is Suica, obtainable from any JR station in Tokyo and the surrounding area. Its counterpart, Pasmo, is acquired from public transport services other than JR (primarily Tokyo Metro and Toei Subway) in the Tokyo area, although the two cards are usable interchangeably. You can also obtain a Suica by downloading the Suica App for free on your phone. With this app, you don't have to purchase a plastic Suica, and it doesn't require you to pay an initial fee or deposit as well. 

For more detailed information on Japanese IC cards, check out our guide to Everything You Need to Know About Suica, Pasmo, and other Japanese IC cards.

 

Suica App can be downloaded from Google Play and the App Store

Apple Pay and Google Pay + Suica

Apple and Google Pay are both downloadable from their respective device stores, and there's a good chance that visitors to Japan will already have them on their phones. In general, it is best to assume that only Japanese credit cards work for Apple Pay and Google Pay in Japan. But you can work around this problem by adding your Suica to Apple Pay or Google Pay and then adding money to your Suica with your Apple Pay or Google Pay payment cards from your home country. In this case, you have to tell the staff that you want to pay by "Suica."

You can directly pay with your Apple Pay or Google Pay cards from your home country only at the few (though increasing) retailers that have the NFC Visa/Mastercard/Amex contactless acceptance marks at the payment terminal. In that case, you have to tell the checkout staff that you want to pay with "credit" or "NFC Pay." Examples of shops that accept this type of payment are Lawson, Tsutaya, McDonald's, Tokyo Disneyland, and Doutor.

If you live in Japan, have a Japanese bank account and Japanese phone, you generally won't have any problem storing virtual versions of any credit, IC, or point card such as Suica, WAON, or Nanaco on your Apple Pay or Google Pay. Once you've installed the app and set up a card, all that's left is to charge it up, select the card you want to use, and hold the phone up to a scanner when paying for something or passing through a ticket gate. 

 

Google Pay can be downloaded from Google Play

Apple Pay can be downloaded from the App Store

Cashless Payment Options for Long-Term Residents

Smartphone Payment Apps

These apps allow the user to pay by displaying a barcode on the screen which is scanned by the merchant, thus deducting the correct amount from the app’s balance. Small vendors can even scan the code with another smartphone to receive payment without the need for a specialized system.

 

・LINE Pay

If you've been in Japan for any decent length of time, you'll most probably have heard of the messaging app known as "LINE." While most people in foreign countries use messaging services like Facebook Messenger or WhatsApp, in Japan, it's LINE that dominates the messaging scene.

LINE Pay acts as an extension of this app and can be easily charged up by connecting it to a bank account or by paying cash at a big-name convenience store. In addition to this, a handy feature on the app called "Auto Deposit" allows you to set a minimum balance that, when reached, will automatically charge up your balance to a designated amount using funds from your connected bank account. Another great feature is that the app allows you to easily send money and split bills with your LINE friends. Finally, LINE Pay also comes with English support and a reward scheme that effectively returns 1-3% of money spent as points.

 

LINE Pay is downloadable from the App Store or Google Play

 

・PayPay

While PayPay is relatively new to the market when compared to LINE Pay, it has quickly risen to become the most supported cashless payment app and is now available in over 32,000 stores throughout Japan. This app functions by creating an account that can then be linked to your bank account or, if you have one, your Yahoo! Wallet account. PayPay also allows you to send money to friends and family, which is a great feature for those occasions when you're paying together for a meal.

Unfortunately, PayPay doesn't yet have full English support or a permanent rewards scheme; it does, however, host occasional campaigns such as the 0.5% cashback promotion it offered in 2019.

 

PayPay is downloadable from the App Store or Google Play

 

・R Pay

Rakuten's R Pay is another one of the cashless payment giants in Japan and has been active since the early days of the market. This app has English language support available on its website and boasts some tempting incentives when compared with its rivals. Each purchase made using the app earns you Rakuten points, and the amount of points earned is doubled when the credit card linked to your account is one of Rakuten's own. The Rakuten credit card is considered the easiest credit card to apply for in Japan, as the application can be done entirely online and without needing to sign using a "hanko" (Japanese-style stamp/seal).

The standard rate is one point (equal to 1 yen) earned for every 200 yen spent, which can then be used when making other purchases with the app. Signing up for the Rakuten credit card will also get you a sizable 5,000 points immediately!

 

R Pay is downloadable from the App Store or Google Play

 

Point Cards

Much like IC cards, these points cards can be used to pay with a simple touch on a scanner. However, in addition to the quick-pay feature, these cards also serve as rewards cards, earning bonus points when used at compatible stores.

 

・Nanaco

For those seeking a physical payment alternative to the previous mentions, Nanaco ranks high as one of the most usable cards in everyday life. The Nanaco card, identifiable by its chic giraffe mascot, belongs to the 7-Eleven chain of Japan and can be used in any one of its thousands of stores nationwide, as well as at Ito Yokado supermarkets and Denny's restaurants. This card features a point reward scheme that returns 1 point for every 100 yen you spend using it.

You can apply for the Nanaco card online or pick up an application form in any 7-Eleven, YorkMart affiliated store, or at a Denny's diner.

 

・WAON

The WAON card functions similarly to Nanaco; however, this one is instead usable at the gigantic AEON malls that can be found around Japan. This card is not just limited to grocery shopping in these malls, but in fact can be used for purchases at any of the many retailers to be found inside these powerhouses of the retail world. To top this all off, they're also usable at FamilyMart, Lawson, and Ministop convenience stores as well as Aeon’s neighborhood “My Basket” grocery stores. While these cards return half the value compared to the Nanaco card (only 1 point per 200 yen spent), the amount of locations where the WAON card can be used more than make up for this.

It costs 300 yen to get your hands on a WAON card, and the easiest places to obtain one are at any AEON mall, MaxValu store, or Ministop convenience store.

 

・Rakuten Edy

It's worth giving one more shout-out to Rakuten when it comes to cashless payments. While most prepaid cards (such as the previous two) are limited to certain chains of stores, the Rakuten Edy card is probably the most widely-usable prepaid card in Japan. This card functions almost the same as the R Pay service mentioned earlier, with the main difference being that you have a physical, rather than virtual, money card. You can get even more use out of this card by connecting it to a Rakuten account, which can be used for a wide range of online shopping, and if you have a Rakuten credit card, you can double the reward return on purchases—from 1 point per 100 yen spent up to 2 points per 100 yen!

While this card can be used alongside Rakuten Pay as part of a single Rakuten account, we recommend opting for the Edy card if you're looking for a simpler cashless option without the need to set up an account, as you can obtain Edy and charge it up in any of the major convenience stores.

 

・Credit Cards With a Built-In Suica or Pasmo

When getting a Japanese credit card, you might want to consider one that has an IC card (such as Suica or Pasmo) or other point card built right into it. That way, you'll only ever have to carry one card with you that can be used to ride trains and busses, quickly purchase items at the convenience store, or make a more expensive credit card payment. Plus, these cards will automatically re-charge whenever the balance gets below a certain level, meaning you will never have to consciously charge it again! Some of these cards even have a point system that allows you to get rewards or discounts. 

Many Japanese companies, stores, and banks offer this type of credit card with a built-in Suica or Pasmo, so find one that suits you the best, and apply online to quickly start enjoying all the benefits these handy credit cards offer.

*English support isn't provided.

The New Cashless Japan

For those here on a short visit and sticking to the big cities, there's a high chance you'll be able to get by with just a credit card and physical cash as a backup (especially when visiting more traditional stores or restaurants that often only take cash). IC cards also provide a lot of convenience for visitors without being overly complicated to set up, and make for nice souvenirs of your time here. 

If you're here for more than a short holiday, the point rewards schemes of most cashless cards and payment apps provide good reasons to get your hands on at least one. LINE Pay is perhaps the easiest to get started with as most people already have the app installed for its messaging service, but there's everything to gain by using as many of the listed options as possible! If you're able to save even just 1% on all of your purchases, you too will be able to see the savings start to accumulate.

Whether you're in Japan for a short visit or here in the long-term, and regardless of whether you opt for cards or phones when you're out shopping, there's plenty of choice when it comes to cashless payments in Japan.

 

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