A look at payment methods in Japan

If you've been in Japan for a while, you may have noticed a quiet but still noticeable shift from cash to cashless payments. Not so long ago, even chain restaurants and shops were cash-first, but these days you will find more and more places accepting credit cards, smartphone payments, or both. Of course, many mom-and-pop style shops still stick to cash only, but the options for going cashless are constantly expanding. For us, that can make life a lot easier both financially and practically.

A recent nationwide survey of 500 people highlighted an interesting trend, which is that the way consumers here pay for things often depends on the size of the bill. For newer expats, I think these insights can be useful when deciding which payment apps and cards to rely on.

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For small purchases, smartphone apps dominate

For bills under 1,000 yen, smartphone payments such as PayPay, Rakuten Pay, and d Pay were the most popular choice, and were used by more than half of respondents. Only about 30 percent opted for credit cards. The reasons given focused on speed and convenience, since nobody wants to fumble for coins, and app payments are often just a quick scan away.

Large purchases are where credit cards take over

For restaurant bills above 3,000 yen, the pattern flips. Credit cards were used by more than half of consumers, while smartphone payments dropped to just over a third. This shift is tied to the benefits cards provide such as reward points, the option to pay in installments, and clearer expense tracking.

Why this matters

Only about 30 percent of people in Japan still use cash alone, so if you're relying on cash for everything, it's likely you're missing out on both convenience and perks. For us as expats, this can mean things like clearer budgeting (since credit card statements and app histories make it easy to track spending), extra value (as many Japanese cards offer reward points or cashback for dining and shopping), and less friction, with apps reducing hassle for small purchases and cards simplifying larger transactions.

Info Source: https://prtimes.jp/main/html/rd/p/000000014.000074582.html