Japan’s history of mobile payments progress is one of the more curious stories in the field… The country was home to one of the world’s first mobile commerce innovations with the DotCoMo mobile wallet all the way back in 2004. And yet Japan remains a heavily cash-based economy…
[Bain Capital Tech:] “It’s just a very different cultural market…” Japanese consumers have a well-established preference for managing transactions in cash, but … that coming to an “inflection point” where things could soon change… [however] … there’s likely a subset of Japanese consumers who will simply never go digital…. Japan has a population demographic that’s older on average than that of many countries, and many of those consumers have a strong preference for cash.
… a possibly larger if less well-known challenge on the payments relationship’s merchant side… “It has been fairly complex for merchants to actually accept even just multiple credit cards… You need to have multiple different networks.
But… new technology players like hey, Rakuten and others have successfully started to open up that underdeveloped market with easier-to-implement payment terminals and infrastructure. That’s allowed small merchants to start accepting things like different card brands and new digital options like mobile wallets.
“… When we look at eCommerce and cashless payments, we see them becoming more durable once merchants adopt these forms of payments [and] consumers get used to the convenience of not carrying cash around and having things delivered. We don’t think that’s going to go backwards any time soon.”