BANKING TECHNOLOGY | Staff Reporter, Japan

Payment apps make headway in cash-heavy Japan

Fintech firm PayPay is setting aside $91m of reward points to incentivise usage.

Fintech challengers are trying to break Japan’s reliance on cash. For one, payment service provider Paypay has been tapped by Sumida Ward, one of the most popular tourist destinations in Tokyo, in a bid to attract more foreigners who are at home with paying through credit card or other means of cashless transactions, reports Japan Today.

PayPay has been stepping up its game amidst intensifying competition through its campaign in February to allot a total of $91m (JPY10b) worth of reward points to its users until May following a similar campaign in December.

Also read: Japanese banks join cashless revolution in digital shift

Japan’s major banks have also been rolling out initiatives to foster e-payment adoption, with Mizuho Bank launching an app that can work as a debit card, a Suica prepaid e-money card, and an East Japan Railway Co transport pass.

Meanwhile, the Kanagawa prefectural government said in November launched a ‘Cashless City’ campaign which will allow payments for property taxes and various other taxes to be made through e-payments provider Line Pay.

Japan has been laggard in adopting cashless transaction compared to its East Asian peers - Korea and China. According to a 2015 data from Japan’s Ministry of Economy, Trade and Industry, cash remains king as payments by credit cards and transactions account for less than 20% of personal spending, compared to the 90% in Korea and 60% in China carried out through e-payments.

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