Domestic Cashless Payment Market Projected to Expand to 126 Trillion Yen by FY2023

Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the domestic cashless payment market and has found out the market overview, the business strategies at service providers, and the future perspectives until FY2023.

Market Overview

The domestic cashless payment market size based on the total amount of money paid by the methods other than cash has attained 82 trillion yen in FY2018 and is expected to exceed 89 trillion yen in FY2019.

There have been attempts to build infrastructure of cashless payment in order to improve convenience for increasing number of foreign tourists as 2020 Tokyo Olympic & Paralympic Games approaching. Toward the Rugby World Cup to be held in Japan in 2019 prior to the Olympic Games, the Act for Partial Revision of the Installment Sales Act has taken effect as a measure to prevent unauthorized use of credit card terminals at membership stores by mandating to embed IC chips into credit cards, and contactless EMV, which had already been accepted overseas, has become domestically available in a rapid manner.  

Noteworthy Topics

As a new payment method, the payment through QR codes has been rapidly expanding its businesses and users. The domestic QR code payment market size is expected to expand to more than 2 trillion yen for the future.

QR code payment has been adopted at increasing number of businesses in Japan aiming to attract the users of Alipay and WeChatPay already accepted in China. In 2018, the number of domestic QR-code-payment-service providers has increased to encourage the adoption of their systems at various businesses by appealing their low initial costs and commission fees. Because QR codes have a characteristic of being easily combined into marketing measures, they are increasingly adopted into businesses as the form of smartphone applications.

In such a status, there have been a series of some businesses newly entering the market one after another which have carried out large-scale campaigns that is unable for conventional payment service providers to do so, giving a great impact to the cashless payment market. QR code payment is expected to contribute to the future cashless society.

Future Outlook

The domestic cashless payment market size is likely to expand to 126 trillion yen by FY2023. Expansion of credit card payment as well as prepaid-card payment and debit-card payment is expected.

The market expansion stems partly from the government-led building of infrastructure for cashless payment, which is likely to expand the contactless payment as a whole. Also, it stems from increasing users of QR code payment and those payments via smartphone applications due to improved convenience and profitability for users’ side.  

By making API available for the future, the market invites more new payment businesses to generate the possibility of highly-value-added payment services for the users and of new opportunities of new payment services through the progress of IoT, together with the potential prevalence of automatic convenience stores.  

On the other hand, it is thought to be indispensable for cashless payment businesses to develop higher-level data marketing to make new profits. For the future, these businesses are expected to secure the profits via new services by effective collecting of data, taking marketing measures and providing solutions by utilizing customer data and their spending history, by intertwining those peripheral services including MA (marketing automation) and BI (business intelligence).   

* MA indicates those systems or services which integrate a large number of prospects and customers and automatically assess them based on the appropriately-designed scenario, and implements that scenario to bring such customers the way the enterprise wants, in order to generate a highly-accurate negotiations with that customers.  

Research Outline

1.Research Period: December, 2018 to April, 2019
2.Research Object: Domestic leading payment service providers, credit card enterprises, prepaid-card issuers, debit-card issuers, QR code payment service providers, payment solution providers, terminal vendors, etc.
3.Research Methogology: Face-to-face interviews with our expert researchers, survey via telephone and email, and literature research

Domestic Cashless Payment Market

The cashless payment market in this research indicates the amount paid by the methods other than cash, which include the payment by credit cards, debit cards, prepaid cards and others. The market size is based on the amount paid. “Others” include the mobile payment and the payment through carriers.

Published Report

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