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Japan's Real-Time Payment Market is expected to register a 35.1% CAGR in the forecasted period. Real-time payment systems are proliferating worldwide due to increased consumer demand for speed and convenience. There is a continued shift away from cash due to card transactions' strong performance in combination with payment solutions enabled by innovation (for example, real-time payments and mobile wallets) and regulation (for example, the second Payment Services Directive, better known as PSD2 and open banking).
- The growing adoption of smart devices and booming online retail commerce drives the rapid adoption of real-time payments. While the private sector is trying to promote commerce, governments tend to lag; yet there is the increased usage of real-time payments that could increase tax collection and enhance fraud prevention.
- Real-time payments are also helping in modernizing bank account-based payments. Compared to legacy bank transfers, RTP offers added benefits, such as messaging capabilities, enhanced data, increased security, and real-time funds availability. These systems provide significant benefits to all stakeholders in the ecosystem.
- The rising tide of real-time payments reflects growing consumer demand for real-time transactions, driven due to the ubiquity of smartphones and other connected devices, which have catalyzed consumer expectations for immediacy.
- However, Japan has long been recognized for its significant reliance on cash, which poses a challenge for banks attempting to transfer more mundane, low-profit operations to digital channels. Furthermore, the government has set a target of growing cashless payments to around 40% of all transactions by 2025, up from approximately 20%.
- Furthermore, the coronavirus outbreak has motivated more cash-oriented individuals to abandon banknotes and coins, assisting banks in their digitalization efforts.
Scope of the Report
Real-time payments are instant or immediate payments and are defined by the Euro Retail Payments Board (ERPB) as electronic retail payment solutions that are available 24/7/365. Immediate payments enable businesses and consumers to make and receive payments in real-time, providing convenience, speed, and faster availability of funds.
Japan Real-Time Payment Market is segmented by Type (P2P, P2B).
|By Type of Payment|
Key Market Trends
Digital Payment Trends will drive the Market
- The Japanese government expects cashless transactions to account for at least 40% of all transactions by 2025, up from around 20% last year. It thinks that increasing digital payments will boost tourism and spur financial sector innovation in the country. This will eventually increase the need for real-time payments.
- According to FIS, Japan's share of cash point-of-sale payments fell 15% yearly (YoY) in 2021, compared to a 7.8% YoY reduction the year before. Consumers may have opted for digital payments to avoid touching currency during the pandemic.
- The Worldline offering in Japan is built on strong cooperation with Vesca, a major local payment solutions and network service provider (NSP). Worldline will handle transaction processing, leveraging its worldwide payment processing facilities' presence, size, and technology, while Vesca will serve as the country's technical enabler and acceptance layer. Starting to accept credit cards will no longer be difficult for shops, and they will be able to do it at a low cost.
- However, Japan's continuous cash payment trend is driven by Konbini culture. Cash is still widely used in Japan. The development of konbini, convenience stores that accept cash payments for internet transactions, can explain this. Customers must pay within six days of receiving the merchandise and show identification. Teenagers without bank accounts or credit are particularly fond of Japan's 55,000-plus konbini. In Japan, cash has a cultural reputation for providing confidentiality and privacy when making payments, and it is still available for cash-on-delivery choices.
- Several online shopping events in Japan are unique to the country. Summertime in Japan is a time of increased sales and bonus payments to staff. Luxury goods, travel, and leisure items are common purchases. White Day, March 14th, and the Christmas holiday are two more popular shopping days. In Japan, Black Friday is progressively gaining in popularity. These events drive the Real-Time Payments Market.
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Increased Smartphone Penetration to drive the Market
- In Japan, about 92% of persons aged 30 to 39 will use smartphones to access the internet in 2021. In the case of those in their twenties, the percentage was slightly lower. According to the Ministry of Internal Affairs and Communications, only 12.1% of those aged 80 and older used cell phones to access the internet (Japan).
- Because of the widespread availability of smartphones in the 2010s, mobile internet usage has increased dramatically in Japan. Smartphones have become the most popular device for accessing the internet. Mobile internet connections are utilized for various things, including interacting with friends on social media and watching new and interesting shows through streaming services. Such tendencies will propel the region's tidied market.
- Despite having a high internet penetration rate across practically all age categories, most Japanese respondents said they felt uneasy using the internet. This trend was more prevalent among people in their forties and fifties. A probable leak of personal information or one's access history was ranked first in a poll of the top reasons why individuals feel unsafe when using the internet. Computer viruses and bogus billings or scams were among the other concerns the majority of respondents expressed.
- According to a survey conducted by the Ministry of Internal Affairs and Communications (Japan) in September 2021, a leak of one's personal information or browser history was by far the most common reason for Japanese respondents to feel insecure when using the internet, with more than 90% mentioning it. Privacy concerns were followed by computer virus attacks and bogus billings or frauds. According to the same survey, most people in Japan feel anxious when using the internet, with the older generations having a higher tendency to feel this way. Such trends are expected to hamper the growth of the real-time payments market in every demography of the Japanese population. Leaking personal information is something that can also impact the payments habit of the younger population.
- The studied market will be driven by smartphone penetration and internet services in Japan. Japan offers some of the best internet services in the world. In January 2021, there were 117.4 million internet users in Japan, according to DataReportal. Between 2020 and 2021, internet users increased by 890 thousand (+0.8%). In January 2021, 93.0% of Japanese people had access to the internet.
The Japanese real-time payment market is fragmented due to various companies' presence in this country. The market has become an attractive choice due to rapidly changing customer tastes, attracting considerable investment. Because of the immense potential growth, the market is fragmenting due to the new entrants. Service providers are creating coalitions to encourage product innovation.
- In March 2022 - Worldline, a global leader in payments services, announced its entrance into Japan, where it will handle credit card payments for retailers across the country. Japan has large development potential for card payments because it is an economically mature, very secure nation with conservative consumer habits.
- In March 2022 - Worldline expanded its business into Japan, where it now provides credit card payment processing to local businesses. For its growth in Japan, the French payment provider teamed with local payment solutions and network service provider (NSP) Vesca. Vesca will serve as a technical enabler in the country, acting as Worldline's acceptance layer. Worldline intends to launch its service in early 2022. These services will comprise credit card acquiring and point-of-sale card acceptance and processing. According to the corporation, the company wants to increase its e-commerce capabilities in the next months.
- January 2022 - MoneyGram, which specializes in digital peer-to-peer (P2P) payments, has partnered with Digital Wallet Corporation to expand payment options. As a result, Japanese users will be able to utilize the Smiles smartphone app, which is owned by Digital Wallet Corporation and allows money to be sent to over 200 countries and territories.
- April 2022 - Adyen, a global payments startup, has announced a payment processing partnership with Amazon Japan, claiming that it will improve payment data optimization and the whole checkout experience. Amazon Japan strives to improve the user experience for payments and checkout using Adyen's platform. Amazon Japan will be able to give shoppers a frictionless experience whether they are buying in Japan or abroad by leveraging Adyen's direct acquisition and data-rich analytics.
Table of Contents
1.1 Study Assumptions and Market Definitions
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness-Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Evolution of the payments landscape in the country
4.4 Key market trends pertaining to the growth of cashless transaction in the Region
4.5 Impact of COVID-19 on the payments market in the country
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increased Smartphone Penetration
5.1.2 Falling Reliance on Traditional Banking
5.1.3 Ease of Convenience
5.2 Market Challenges
5.2.1 Payment Fraud
5.2.2 Existing Dependence on Cash
5.3 Market Opportunities
5.3.1 Government Policies Encouraging the Growth of Digital Paymentis expected to aid the growth of Real Time Payment methods amongst commoners
5.4 Key Regulations and Standards in the Digital Payments Industry
5.4.1 Regulatory Landscape Across the World
5.4.2 Business Models with Potential Regulatory Roadblocks
5.4.3 Scope for Development in Lieu of Evolving Business Landscape
5.5 Analysis of major case studies and use-cases
6. Market Segmentation
6.1 By Type of Payment
7. COMPETITIVE LANDSCAPE
7.1 ACI Worldwide Inc.
7.2 Fiserv Inc.
7.3 Paypal Holdings Inc.
7.4 Mastercard Inc.
7.5 FIS Global
7.6 VISA Inc.
7.7 Apple Inc.
7.8 Alipay (Ant Financials)
7.9 SIA SpA
8. Investment Analysis
9. Future Outlook of the Market
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Frequently Asked Questions
What is the study period of this market?
The Japan Real Time Payment Market market is studied from 2022 - 2027.
What is the growth rate of Japan Real Time Payment Market?
The Japan Real Time Payment Market is growing at a CAGR of 35.1% over the next 5 years.
Who are the key players in Japan Real Time Payment Market?
ACI Worldwide, Fiserv, PayPal, Mastercard, FIS are the major companies operating in Japan Real Time Payment Market.