See More on Facebook

Business

Japan turns to smartphone payments

Businesses, consumers increasingly turn to smartphone payments as modus operandi.


Written by

Updated: February 25, 2019

More and more businesses are introducing cashless payment services via smartphones, with quick, easy methods such as scanning QR codes encouraging the spread of these payments. However, the field is getting crowded, which will lead to various issues.

Just a few seconds

At Bic Camera’s Ikebukuro main store in Toshima Ward, Tokyo, on Saturday, one customer paid for his shopping via the PayPay smartphone payment service. The 49-year-old man from Kawaguchi, Saitama Prefecture, bought a tripod, and received 20 percent back in points.

“I can buy things at a lower price than with cash, and the bill is settled in an instant,” the man said.

Payment systems using QR codes are essentially the same among their various providers.

At the cash register, the customer tells the cashier which service they want to use and opens the corresponding app on their smartphone. A QR code and a bar code are displayed on the screen.

The clerk scans the QR code or bar code with a terminal, and two or three seconds later a message arrives on the smartphone containing such information as the amount paid and the name of the store. This completes the payment.

There is also a method in which the customer scans a QR code displayed by the store. The purchase made Saturday at the Bic Camera store with PayPay was conducted this way.

Users register such information as a bank account or credit card number with the app. In the case of a credit card, payment is made later; with a bank account the purchase amount is immediately deducted.

“Hardly any of my friends in China carry a long wallet around anymore,” a 24-year-old female graduate student from China said. She expressed hope that QR payments would spread in Japan.

What triggered expansion?

The Osaifu-Keitai service from NTT Docomo Inc. was one of the forerunners among smartphone cashless payment services. Suica and other electronic money cards provided by transportation companies can also be used through smartphones.

One factor that has slowed the spread of such services was that business establishments needed special terminals or peripherals to read electronic data from smartphones.

The smartphone payment services that are increasingly popular these days read such things as QR codes and bar codes. With these systems, business establishments can complete payments with a smartphone or tablet terminal and the bar code reader attached to a cash register, so there is no need to have specialized terminals.

This makes the payment services easy to introduce for businesses such as independently operated eating and drinking establishments, as well as very small to midsize retailers.

Drawing in customers

Different providers are competing over such elements as reward points and additional functions, seeking to draw in customers.

Line Pay, the service offered by the free communications app Line, allows users to split their bill at eating and drinking establishments and elsewhere. They can also send money to friends. Already 1.3 million shops and other businesses have joined the service.

About 60 regional and other banks are participating in the J-Coin Pay service to be introduced by Mizuho Bank in March. The aim is to have at least 300,000 business establishments participating within a few years and at least 6.5 million users.

One of J-Coin Pay’s selling points is that when money transferred to a smartphone from an account is returned to the account, there is no fee for the transfer.

PayPay held a “¥10 billion point-back campaign” at the end of last year, which received a significant response. The second edition of this campaign will begin this month, in a bid to increase PayPay’s user base even further.

Each provider is trying to devise ways to use points to their advantage.

The spread of smartphone payment services using QR codes and other methods has just gotten started. According to trial calculations by the JMA Research Institute Inc., such payments are expected to reach ¥600 billion in fiscal 2019. This represents only about 1 percent of the approximately ¥60 trillion to be spent via credit cards.

In fiscal 2023, the amount of smartphone payment purchases is expected to expand to about ¥8 trillion, on a level with about ¥5 trillion spent via electronic money in fiscal 2017.Speech



Enjoyed this story? Share it.


The Japan News
About the Author: The Japan News is published by The Yomiuri Shimbun, which boasts the largest circulation in the world.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Business

FedEx sues US Commerce Department over crackdown on Huawei

US courier delivery company FedEx on Monday sued the US Department of Commerce over a request that the package giant enforce restrictions on Chinese telecom equipment provider Huawei. In the lawsuit filed in the US District Court in the District of Columbia, FedEx claimed that department’s latest measures to restrict the business activities of US companies with Huawei “place an unreasonable burden on FedEx to police the millions of shipments that transit our network every day.” “FedEx is a transportation company, not a law enforcement agency,” FedEx said in a statement. The department in May added Huawei and its affiliates to an “entity list,” a move that under Export Administration Regulations (EAR) barred US companies from supplying the Chinese company with parts such as electronic chips or providing other technologies without US government approval. Th


By China Daily
June 27, 2019

Business

Putin says US’ Huawei stance aims to contain

Huawei has come under increasing pressure from the US and its allies. The United States was seeking to contain China’s development when it took action against Chinese telecom giant Huawei, and it is doing the same thing to Russia, according to Russian President Vladimir Putin who made the comment during his annual televised Q&A with the Russian people on Thursday. He said the US had targeted Huawei because China has become the US’ rival. “Let’s take the attack on Huawei: where did it come from and what is the reason behind it? The only reason is to contain the development of China who has become a global rival to another global power-the United States,” Putin said. The Russian president said the West has no interest in changing its attitude toward Russia, and therefore Moscow will not compromise on its fundamental national interests in the face of sanctions.


By China Daily
June 24, 2019

Business

Huawei CEO holds dialogue with US tech experts

The company has come under pressure after the US singled the company out for possible espionage for Beijing. Huawei founder and CEO Ren Zhengfei had a discussion with two American technological gurus, George Gilder and Nicholas Negroponte, at the company’s headquarters in Shenzhen on Monday. Ren said he believes the artificial intelligence industry is a driving force for human society, and people need to be inclusive and not regard AI as “negative” future technology. Ren said that Huawei has been committed to business ethics and compliance with laws and regulations since the company was started. “Huawei didn’t, and w


By China Daily
June 19, 2019

Business

Vietnam to be among world’s most dynamic markets by 2030

The country has reached amazing levels of progress in the last two decades. With an emerging market economy and continued strong growth, Vietnam is set to become one of the most dynamic markets in the world by 2030, according to Euromonitor International, a global market research company. An Hodgson, Euromonitor International’s income and expenditure research manager, said the company’s research database showed that urbanisation, with the associated concentration of income, wealth and population, would propel Việt Nam’s commercial success by 2030. Published last month, the research database has found that Vietnam will be the third biggest urban market by consumer numbers and fifth biggest by total spending in Southeast Asia. By 2030, the country’s urban consumer market will expand to 46 million consumers and $169 billion worth of spending. GDP growth is expected to rea


By Viet Nam News
June 13, 2019

Business

Li pledges to improve business climate

Li Keqiang says China taking steps to open up economy to foreign businesses Premier Li Keqiang reaffirmed China’s commitment to improving its business environment by deepening reforms to streamline administration and carrying out large-scale tax cuts and fee reductions. Li said in a meeting on Tuesday with World Bank President David Malpass that the country will bring its business environment more in line with market principles, international standards and the rule of law as part of efforts to promote high-quality development. He noted China’s cooperation with the World Bank, which is in keeping with its steps in reform and opening-up and benefited the country’s growth. The global landscape is complex and fluid, and the Chinese economy is facing various risks and challenges, he said. Further cooperation between China and the World Bank will help promote poverty reduction, narrow


By China Daily
June 12, 2019

Business

Restrictions on Chinese firms could drive up 5G cost

China is increasing pressure on consumers in a bid to end restriction on its major tech firms. Europe would have to pay an extra 55 billion euros ($62 billion) for 5G networks and suffer an 18-month technology delay if it bans telecom equipment purchases from top Chinese manufacturers, according to an industrial report. The report by the GSM Association, which represents 750 mobile operators worldwide, said Ericsson, Nokia and Samsung, the non-Chinese contenders in the 5G market, do not have the capacity to handle all of the shift from 3G and 4G networks to 5G in Europe while honoring contracts already signed in North America and Asia. Huawei and ZTE account for about 40 percent of the EU market, and Huawei is “currently a pioneer in 5G technology”, according to the GSM analysis, first reported by Reuters and Agence France-Presse on Friday. “A ban on Chinese v


By China Daily
June 11, 2019