Rising Credit Card Usage Giving Headaches To Japan's Merchants

Above, Shibuya Crossing in Shibuya's shopping district. Photo by Armand Vaquer.

Japan is generally known as a cash-only country. Credit cards have historically been rarely used.

However, since there is now a tourism boom of foreigners to Japan, credit card usage has been rising. Along with that, they come with a few headaches for merchants.

During my eight trips to Japan, I have never used a credit card. I strictly used cash obtained from the foreign exchange window at Narita Airport.

Nikkei Asia reported:

TOKYO -- As international visitors flock to Japan, their shopping and dining have put such a strain on credit card companies here that some are considering charging higher fees for foreign-issued cards.

When a foreign-issued credit card is used in Japan, the Japanese card company that processes transactions for the merchant must pay fees to both the overseas issuer and the international brand holder, such as Visa or MasterCard.

These payments can outweigh the merchant fees they collect in Japan, leaving losses that are expected to top 30 billion yen ($205 million) this year, about 50% more than in 2023.

Seven out of eight major Japanese credit card companies surveyed by Nikkei say their losses have grown from last year. Of these, six said they were considering or already had begun applying different fees to overseas cards.

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