21 Jun 2021
Posted in Banking
Japan credit card payment market to cross US$1 trillion in 2024, forecasts GlobalData
The credit card payments market in Japan is set to register a compound annual growth rate (CAGR) of 7.6% to reach JPY105.9 trillion (US$1,026.5bn) in 2024, forecasts GlobalData, a leading data and analytics company.
Japan is one of the few countries globally, which is able to control the COVID-19 pandemic to a large extent with fewer confirmed cases compared to markets like the UK.
According to GlobalData’s Payment Cards Analytics, the value of credit card payments in Japan is estimated to grow by 9.2% in 2021 with easing of government restrictions, opening businesses and rise in consumer spending.
Nikhil Reddy, Payments Senior Analyst at GlobalData, comments: “Japan has a highly evolved credit card market with each individual holding more than two cards. Pricing benefits and wider merchant acceptance are driving credit card usage in the country. In addition, most debit cards do not support e-commerce payments, which is also helping credit cards growth.”
The government’s push for electronic payments and rising adoption of contactless payments will further push credit card usage in the country. To stimulate consumption following the COVID-19 pandemic, Japan launched ‘My Na Point’ reward program in September 2020, which ended in March 2021. It offered consumers reward points up to JPY5,000 (US$48.4) on purchases made using digital payments such as debit card, credit card and prepaid card.
The demand for ‘touch-less’ payments has been rapidly rising in Japan after the COVID-19 pandemic. In a survey released in November 2020, American Express found that 77.4% of respondents increased use of contactless credit card payments while 75.8% of respondents would continue to use contactless credit cards even after the pandemic.
The upcoming Olympics scheduled for August 2021 is also expected to provide an impetus to the payments industry. All major banks and payment participants are making their payment infrastructure compatible with foreign-issued cards and installing POS terminals at locations with high footfall, such as tourist attractions and supermarkets.
Mr Reddy concludes: “Credit card adoption is high in Japan. Government initiatives to promote electronic payments coupled with growing usage of contactless cards for low value transactions will drive growth of credit card payments over the next five years.”