Apps ready to disrupt Japan’s cashless payment space



6% (Japan) vs. 98.3% (China).

These numbers are the usage rate of mobile payment according to an official report published by Bank of Japan (BOJ) in 2017. At 6%, the state of mobile payment usage in Japan is incredibly low compared to China’s 98.3%.

In Japan, paying cash is still hugely popular among the Japanese, and the adoption of mobile payment such as Apple Pay or LINE Pay is still low.

At $908 billion in 2015, Japan’s cash circulation equals roughly 19% of its GDP. It’s the highest level among 19 developed nations and regions according to a study by Bank of Japan.

But one must not forget – Japan used to be ahead of its time in the digitization of payments. In 2001, Japanese people could pay for train tickets using their phones, six years before the release of iPhone and more than a decade prior to the launch of mobile payment such as Apple and Android Pay.

Cashless = Electronic IC cards

Back in the early 2000s, contactless payment in the form of electronic IC cards was already widely adopted in Japan, thanks to Japan’s NFC (near field communication) technology. The electronic card called Suica and Pasmo, popular transportation IC cards, are not only good for public transport, they have also been widely supported by convenience stores, vending machines, and other retailers in Japan. Wikipedia has a very good article about Suica.

When Apple Pay arrives, Japanese people might not immediately see the merit or need of switching to Apple Pay or other mobile payment, as they already enjoy the convenience of contactless payment with Suica or Pasmo.

This graph, from the BOJ’s report, shows the electronic money transaction amount in Japan was almost $40 billion US dollars in 2015, much higher than countries like Italy, Russia, India, Singapore etc.

bank of japan mobile payment report

Even though the state of Japan’s mobile payment adoption leaves much to be desired, some Fintech start-up companies in Japan are already in the race to disrupt this space.


LINE Pay is probably the oldest and most well-known mobile wallet and peer-to-peer service in Japan, thanks to the LINE app which is used by 70% of smartphone users in Japan.


Kyash is a Japan’s peer-to-peer mobile payment start-up founded in 2015. Users can send money to friends via SNS, mobile phone number.


Paymo and Paymo Biz are services offered by Japan’s Fintech company Anypay. Similar to Kyash, Paymo offers easy and fast peer-to-peer payment.

Payment solution for small businesses:

This CM of Paymo, featuring a stylish rap song in Japanese, introduces the service by showing how a girl uses this app when breaking up with a boyfriend, joining a girls night out and using it at a Japanese group blind dates (gokon nomikai).

Just as the inbound tourism boom has widened the acceptance of WeChat Pay and Alipay at Japanese merchants, the preparation to welcome more visitors for Tokyo’s 2020 Olympics will inevitably become a catalyst for Japan to embrace mobile payments.

About the author

Founder and Author @TokyoTinyData. Capricorn. I write about startups and businesses launched by global citizens in Japan. Read about founders who launched businesses, and foreigners who built their careers in Japan.

Add a comment


Please enter your comment!
Please enter your name here

Related posts