Fintech in Japan - statistics & facts
Fintech is a compound of the words finance and technology and describes the use of information technologies, such as blockchain, artificial intelligence (AI), and big data, to provide improved and innovative financial services. Payment and settlement services form the core of the Japanese fintech sector. In 2021, major U.S. players entered the Japanese digital payment market through acquisitions, resulting in the largest fintech merger and acquisition M&A deal in the Asia-Pacific region.
Major players involved in Japan’s fintech sector include Rakuten and PayPay. Both companies boast a digital services ecosystem with a large customer base. Next to their smartphone payment services PayPay and Rakuten Pay, they offer a variety of online and mobile financial services, including banking, payments, securities trading, and insurance. Big international players entered the Japanese fintech market through acquisitions of startups. PayPal’s acquisition of Buy Now, Pay Later (BNPL) startup Paidy became the largest fintech investment deal in the Asia-Pacific region in 2021, while Google acquired payment and settlement startup Pring.
Digital payments in Japan
The fintech sector encompasses a variety of segments, including digital payments, alternative finance, and digital investment. Digital payments and remittance services form the core of Japan’s fintech market. Driven by the coronavirus pandemic and government efforts to increase cashless payment usage, digital payments have gained popularity among Japan’s cash-oriented consumers. The share of cashless payments has steadily increased over the past years, with QR code payment services growing the fastest. Usage of non-bank fund transfer services also increased, with the value of money transfers rising significantly over the past years. The government has eased regulations in the non-bank fund transfer services segment, facilitating the entry of new players by lowering the capital requirements for market participants. In addition, a ban on digital wage payments was lifted in 2023, allowing workers to receive salaries through non-bank payment applications.Key players in the Japanese fintech sector
In 2016, the Japanese government made the promotion of fintech and the creation of a fintech ecosystem a key policy measure of its revitalization strategy. Since then, it has taken a series of measures and regulatory adjustments to promote growth in the fintech sector. Tokyo, the world’s biggest city by gross domestic product, has formulated the digitalization of finance through the use of fintech as one of the key measures to achieve its goal of becoming a global financial city. This includes improving the startup ecosystem, attracting fintech companies, and promoting cashless payments in the city.Major players involved in Japan’s fintech sector include Rakuten and PayPay. Both companies boast a digital services ecosystem with a large customer base. Next to their smartphone payment services PayPay and Rakuten Pay, they offer a variety of online and mobile financial services, including banking, payments, securities trading, and insurance. Big international players entered the Japanese fintech market through acquisitions of startups. PayPal’s acquisition of Buy Now, Pay Later (BNPL) startup Paidy became the largest fintech investment deal in the Asia-Pacific region in 2021, while Google acquired payment and settlement startup Pring.
