Contactless payments in Japan are steadily
increasing, with over 98.4 million payment devices currently in
distribution. Although usage remains limited when compared with the
overall size of the cash payment market, Celent expects device growth to
reach nearly 180 million in 2010.
Japan is undergoing a transformation in its
employment of alternative payment methods. In 2000, electronic money (also
referred to as contactless payments) emerged. When it first appeared,
there was little impact on both the market and regulators. Despite low
expectations for this niche channel, electronic payments have increased
dramatically. The impact of contactless payments on small cash
transactions, particularly in large cities, is growing. However, overall
usage remains small, despite major efforts to expand their presence.
In a new report, Electronic Money: Contactless
Payment in Japan, Celent explores the complicated Japanese electronic
money market. There are currently over 98.4 million devices in the
country, including both smart card and mobile phone products. Usage is
expected to grow steadily during the next five years. Contactless payments
consist of three different payment methods: prepaid (stored value),
auto-charge, and post-pay. The latter two are linked with credit cards,
which has helped them enter the small payments market. Key success factors
include an increase in the number of merchants that accept contactless
payments and promotion by both issuers and distributors.
“While credit cards are both convenient and
heavily distributed, consumers perceive that this channel should not be
used for smaller payments. This is a common misunderstanding in the
Japanese market,“ says Yumiko Manchu,
an analyst at Celent. “In contrast, usage of debit cards is limited to
less than 10% of credit card transactions and continues to decline. There
remains a vast segment of the consumer population that prefers cash
payments. This is the segment that electronic money has targeted in order
to achieve wider acceptance."
Major electronic money vendors covered in this
report include PASMO, Suica, Edy, Quicpay, iD, waon, and nanaco. Profiles
provide a description of vendors’ issued numbers, the number of usable
places, and the types of devices and payment methods they provide. The
report also evaluates the market structure for contactless payments.
The 35-page report contains 14 figures and three
tables. A table of contents is
available online.
