Japan’s digital wallet market was valued at US$9.211 billion in 2020. The market growth of the digital wallet is projected to remain slow in Japan as it is a cash-based country owing to the large ageing population base over there. According to the data provided by the Internal Affairs and Communications Ministry, old-age people accounted for 28.4 percent of the country’s population and 12.9 percent of its labour force in 2018. According to Japan’s Ministry of Economy, Trade, and Industry, only 18.4 percent of the country’s household final consumption expenditure was paid via cashless payment methods, including electronic money, credit cards, and mobile payments, in 2015. To this date also, four out of five purchases are still made with cash in Japan. However, companies, as well as banks, are still making efforts to encourage people in Japan to use digital wallets for easy and convenient transactions. For example, in March 2019, Japanese bank Mizuho along with around 60 financial institutions, launched a new digital wallet- J-Coin Pay- which uses a QR code to process smartphone payments. In December 2019, PayPay, backed by Yahoo Japan and Softbank, announced that it managed to sign up 15 million customers within ten months of its launch despite the general reluctance among the rapidly-ageing population to give up making payments with cash. Moreover, with digital payments making up only about 20 percent of transactions in Japan, the Japanese government has also planned to double this rate by 2025. All these factors will fuel the market growth in this country during the next five years.
Japan's digital wallet market has been segmented based on the device and application. By device, the market has been segmented into PC's/laptops and smartphones. By application, Japan’s digital wallet market has been classified into money transfer, recharge, movie booking, food ordering, and others.
Key Developments in the Market
The covid-19 has significantly impacted the digital wallet. The increasing surge in active cases and spread of the infection caused many consumers to shift towards contactless digital wallet technology. E-payment systems, often known as cashless payment systems, have progressively emerged as a payment system instrument amid the epidemic. The growing number of digital payments is further driving the use of digital wallets.
LINE Pay Corporation
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