Digital Payments Struggle to Catch on with Consumers in Japan - eMarketer

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Digital Payments Struggle to Catch on with Consumers in Japan

Buyers stick with cash and cards due to security worries

October 14, 2016

Japan is frequently mentioned as a market with sophisticated, digitally-savvy consumers, where advanced media behaviors like watching TV on smartphones has long been the norm. When it comes to other digital habits like payments, however, consumers are still stubbornly low-tech.

Payment Methods Commonly Used at Physical Stores* by Internet Users in Japan, by Age, Aug 2016 (% of respondents in each group)

According to an August 2016 examination by Meiji Yasuda of payment methods used by internet users in Japan in physical stores, nearly 70% across all ages commonly used cash for their transactions. This was more than double the percentage of internet users who commonly chose a digital payment (28.2%).

This hesitant embrace of digital payments has come up in previous investigations of Japanese transaction habits. Another March 2016 survey of payment methods used for digital purchases among digital buyers in Japan found that credit cards were the most popular payment method, mentioned by 80.7% of respondents. Other payment methods like paying at convenience stores (17.1%) and cash on delivery (12.4%) were also popular answers, beating out digital payment services, which were mentioned by just 6.9% of respondents.

What might explain this lackluster embrace of digital payments in a market known for its forward-thinking technology and love of ecommerce? One reason is that consumers in Japan have significant worries about security, a phenomenon which may be holding back more widespread adoption.

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