Credit card industry in Japan
The first credit cards in Japan were issued in the 1960s. Since then, credit cards have emerged to become the most popular alternative to cash. Accounting for 30.4 percent of consumer spending, credit card payments are used far more than any other digital payment instrument in Japan, especially when compared to debit cards.Japan’s first credit card company JCB was established in 1961. Today, the company is one of Japan’s leading credit card issuers and operates an international credit card network. JCB covers around one-third of the domestic payment card market, competing with other global brands, such as VISA and Mastercard. Next to the international brands, there are several domestic-only credit card brands available. Cards are issued by banks and credit card companies, some of them affiliated with major retailers and manufacturers. Major credit card companies in Japan include AEON Financial Service, Credit Saison, Mitsubishi UFJ Nicos, Rakuten Card, and Sumitomo Mitsui Card.
How are credit cards used?
With more than 301 million cards issued by 2022 and many card holders owning more than one card, credit cards are a widespread means of payment consumers resort to when making large purchases in department stores, general retail stores, or when shopping online or making regular payments. Credit cards are often tied to reward programs and additional services, which is a major incentive for consumers to use them. Japanese consumers are risk-averse when it comes to credit card debt. Credit card purchases are usually paid off within the following month and deducted from bank accounts. While multiple installment options and revolving credit are available, they are far less common than in other countries. Overspending was one of the leading concerns regarding credit cards among consumers, next to fear of fraud.The pandemic and government efforts to promote cashless payments have led to more and more consumers opting for cashless payment methods as an alternative to cash in recent years. Amid these developments, the value of credit card purchase transactions, which has more than doubled in the last decade, increased to 93.8 trillion yen in 2022. According to forecasts the credit card market is expected to grow continually over the coming years.
