Mobile Payments Gain Favor with Japan's Risk-Averse Shoppers

Convenience and wide acceptance win converts

Author: Jeremy Kressmann

February 17, 2017

Security concerns have shackled consumers’ adoption of digital payment technology in Japan, where many still rely on tried-and-true purchase tools like cash and credit cards. But that’s changing now, with a growing interest in mobile payments, which seem to be helping make digital purchasing more attractive to the country’s consumers and retailers. 

An October 2016 survey of smartphone users in Japan by advertising firm Hakuhodo found that more than 31% of respondents were interested in consolidating various payment functions on their smartphones. Among male smartphone users, the number was even higher, with 41.3% of respondents saying they were interested. 

The concept behind payment consolidation has existed for more than a decade in Japan, in the form of a technology standard called “Osaifu-Keitai” (mobile wallet). Consumers have been able to use their smartphones to pay for public transit tickets, while also storing personal information such as credit cards, loyalty cards and personal identification. 

The increasing popularity of the system hasn’t been lost on hardware manufacturers like Apple, which has worked to standardize newer versions of its iPhone and the Apple Pay system to align with Japanese payment standards. 

Other sources suggest this mobile-focused payment technology may indeed be winning over more consumers in Japan. A July 2016 survey by Deloitte discovered that nearly 50% of mobile phone users in the country had used mobile payments in-store. 

Even though Japanese consumers still seem hesitant to use digital payment methods, smartphones are gaining acceptance in the country, and their winning combination of convenience and personalization could make mobile payment adoption harder to resist.