![Ten thousand yen notes. Image Source: jun rong loo from Unsplash Money Matters: Navigating Japan's Payment Options](/_next/image/?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2Fx0c10dda%2Fproduction%2F87c66c3fa68a9662a4150a66f838a773aa3ef706-1920x1280.jpg&w=3840&q=75)
While payment apps are slowly growing in popularity within the Japanese economy, the reality is that Japan is still a cash-carrying society. This article deals with handling money in Japan.
Before I break down all payment methods into their separate parts, I just want to explain a few things that will help you to understand payment methods and money exchange in Japan.
Although many countries have been moving towards cashless societies, Japan has been slow to adapt and the country is primarily a cash-carrying society. However, since 2020, this situation has begun to change and payment phone apps have been growing in popularity.
Credit card use has been largely rejected by my many retailers due to payment charges, which are seen as burden to the customer. This does NOT mean that credit card payment is non-existent, but it does mean that credit card payment options are often limited or even absent in some shops, restaurants, or bars. Cash-only options are even more common in rural areas.
I have a large supermarket chain in my neighborhood that accepts cash payment and payment apps, but not credit card. The company made a decision not to accept credit-card payment, but scrambled to adapt to the use of payment apps.
In Japan's move towards a cashless society, prepaid IC cards play a crucial role. These cards, embodying contactless technology, serve as e-wallets, facilitating electronic payments, particularly in public transport and small everyday purchases.
Central to this system are the Suica and ICOCA cards. Suica, prevalent in Tokyo, is evolving with the upcoming “Welcome Suica” card, indicating the dynamic nature of Japan's e-money landscape. In the Kansai region, ICOCA cards are essential for both transport and retail transactions.
The application of these IC cards extends beyond transportation. Accepted in stores, vending machines, and cafes, they reflect Japan’s commitment to a cashless future, streamlining transactions in various daily settings.
Their cross-regional compatibility enhances travel convenience, allowing tourists to use a single card like Suica or ICOCA across different regions. This feature simplifies the travel experience and showcases Japan's integrated cashless infrastructure.
In summary, Prepaid IC cards are pivotal in Japan’s cashless journey, offering an efficient, user-centric solution that caters to both locals and visitors, embodying Japan's innovative and efficient approach to digital transactions.
Smartphone digital payment apps have become very popular in the last few years. While most apps are limited to residents of Japan, both Apple Pay and Google Pay are accepted at a variety of stores. I'm being a little vague here because the number of store that accept this type of payment seems to be growing everyday. You will find that even modern vending machines accept app payment, which is a lifesaver in the summer!
Local restaurants, markets, vending machines, ryokan (traditional inn) and places outside of the larger cities often only accept cash.
The good news is there is no limit to the amount of cash you can bring in or take out of Japan. You do need to declare all cash over ¥1,000,000.
You can exchange at airports, banks, and hotels but often the rate is not very attractive. I would advise that you exchange your cash before you reach your destination. Cash rate exchange has become more difficult in recent years since there are fewer bank branches open than previous years.
Japanese banks have closed and downsized many branches in recent years in a mad dash to online services in an attempt to cut costs.
Japanese Banks are moving away from managing ATM's, mostly due to maintenance costs. This is a good thing as most of them (with the exception of JP Bank) do not support international cash withdrawal.
JP Bank ATM's are also an option! JP Bank owns the national post offices around the country, so there will be an international ATM at any post office that you find. Post offices are usually located near major central train stations and the ATM's are usually accessible 24hrs (WARNING: This might not be the case in rural areas or some national holidays).
There has been a rise in third-party ATM's, which are mostly found in convenient stores, supermarkets, and around train stations. This is good for tourists as most of these (not all) support international cash withdrawal. Look at the sign above the ATM to find an illustrated list of the different cards that they accept.
The international convenience store chain, 7-Eleven (known as 7 & i Holdings in Japan) can be found all over the country in large numbers and in close vicinity of other convenience store chains. They are everywhere! And they all have ATM's owned by Seven Bank, which specialize in international banking.
Personally, I use Seven Bank ATM when I need to access my account from back home. They are easy to find and use.
These ATM are available from convenience stores Family Mart and Lawson. These convenience stores are commonly available are Japan, however, they usually don't have as many bank options as the Seven Bank ATM.
Hotels accept major Credit and Debit Cards but they are not widely accepted outside major cities. Ensure you card has your name on the front or it could get rejected. You can only use the physical card not digital cards stored in your phone as an app. Japan has not yet started using digital cards.
Unless your credit card is designed for international spending it is likely you will incur exchange rate margins and currency conversion fees of between 2.5-5%. Do yourself a favor and do some research including looking at Travel Money Cards.
Always opt to pay in JPY because you are likely to be offered a poor exchange rate.
These apps include PayPay, LinePay, Mercari Pay, Rakuten Pay, dBarai, Apple Pay, Google Pay.
Travel Money Cards are popular because they offer:
Depending upon where you live there will be national and international products available to you.Most banks also offer a Travel Card alternative.It can be confusing but check out what suits you best.
·Wise Travel Card Best Exchange Rates
·Travelex Money Card Best All Rounder
·Revolut Best for Low Fees
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With over 30 years of experience in Japanese culture and lifestyle, I am a permanent resident of Japan. As a web developer, I built Romancing Japan from scratch. Although originally from Australia, I have dedicated a significant part of my professional career to teaching at Japanese universities. My extensive travels across Japan have given me intimate knowledge of life in this country, and I am excited to share these insights with you.