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1. Cash Payments vs. Card Payments
One of the most surprising aspects for foreigners in Japan is the widespread use of cash, even in an era where cashless transactions are common in many other countries. While card payments are certainly available, particularly in larger cities and chain stores, cash remains the dominant form of payment in everyday transactions.
In Japan, it’s not uncommon to see people carrying large amounts of cash. In fact, it is considered quite normal to pay for even big-ticket items such as electronics or household appliances with cash. Many foreigners are surprised to find that some restaurants, small businesses, or even public transportation systems may not accept credit cards, especially in rural areas. Foreigners from countries where card payments are the norm may find it challenging to adapt to this cash-centric culture.
On the other hand, credit and debit cards are becoming increasingly accepted in urban centers and tourist-heavy areas. Visa, Mastercard, and American Express are widely used, though some smaller places may only accept Japanese-issued cards. It’s also important to note that Japan doesn’t typically use contactless credit card systems like other countries, meaning the user often has to swipe or insert their card, followed by signing or entering a PIN. This can be an unfamiliar process for those accustomed to quick tap-and-go payments.
Another thing that confuses foreigners is the prevalence of IC Cards, such as Suica and Pasmo. While these are technically electronic money, they are often treated as an extension of the cash payment system. These cards are primarily used for transportation but can also be used for small purchases in convenience stores, vending machines, and even some restaurants. For foreigners, getting accustomed to using IC Cards as both a transportation and payment tool can be a bit daunting, especially since they work differently than standard credit or debit cards.
Lastly, mobile payment apps are gaining popularity, but their use is still not as widespread as in countries like China or the U.S. Foreigners accustomed to mobile payment platforms like Apple Pay or Google Pay might find limited acceptance in Japan. While services like PayPay, Line Pay, and Rakuten Pay are growing in popularity, they are still not as universally accepted, which can create confusion for foreigners who expect a more cashless experience. This discrepancy between traditional cash usage and the slow but steady rise of cashless options is one of the key differences that often perplex foreigners living in or visiting Japan.
For many, the adjustment involves always carrying some cash, particularly in ¥1,000 and ¥5,000 bills, as well as coins. The reluctance of some stores to accept anything other than cash can feel outdated to foreigners from countries where mobile payment apps and card payments have largely replaced physical currency. This balance between cash and cards, with the addition of IC Cards and mobile payments, makes Japan’s payment system unique and sometimes difficult for foreigners to navigate.
2. IC Cards and Electronic Money
In Japan, IC cards and electronic money (e-money) systems are integral to daily life, particularly in urban areas. For foreigners, adjusting to these systems can be confusing at first due to their ubiquity and the multiple ways they can be used. IC cards like Suica and Pasmo, initially introduced as prepaid transportation cards, have evolved into much more than just a way to pay for train or bus rides.
IC cards are now accepted at a wide range of places, including convenience stores, vending machines, supermarkets, and some restaurants. These cards are not credit cards but rather a form of rechargeable e-money. Users load the card with yen at a ticket machine or convenience store, and then they can tap the card on a reader to make payments, much like contactless payments with debit or credit cards in other countries. For foreigners used to cash or card systems, the IC card system may seem unfamiliar but quickly becomes convenient once understood.
One challenge for foreigners is the recharge system. To keep an IC card usable, it must be recharged with yen (¥). Most foreigners will need to find ticket machines, convenience stores, or kiosks where they can load their cards with cash. While many machines accept credit cards for recharging, some still only accept cash, which can be a point of confusion for travelers or residents who are more accustomed to using cards for all transactions. For example, a ¥2,000 recharge (about $14) may be enough for a few days of local travel and small purchases, but forgetting to recharge can lead to issues when trying to use public transport or buy items at a store.
Another aspect of the IC card system that may confuse foreigners is that each region in Japan has its own card, such as Suica for Tokyo, Pasmo for the Kanto region, ICOCA for the Kansai region, and others. However, most of these cards can now be used interchangeably across the country, which reduces confusion for those traveling between regions. Despite this, the sheer variety of IC cards available can still be daunting for newcomers.
In addition to IC cards, Japan has a growing number of mobile payment apps, such as PayPay, Line Pay, and Rakuten Pay, which also function as electronic money. Foreigners who are used to popular international mobile payment systems like Apple Pay or Google Pay may find it challenging to navigate Japan’s unique mobile payment ecosystem. These Japanese apps are gaining popularity, but their acceptance is still not universal. For example, PayPay may be accepted in many retail stores, but it might not work in smaller shops or more rural areas, leading to frustration for foreigners who expect a seamless cashless experience.
Moreover, setting up these mobile payment apps often requires a Japanese bank account or phone number, which can be a hurdle for short-term visitors or new residents. Foreigners who are not fluent in Japanese may also struggle with the language barriers when registering for these apps or navigating their interfaces, which are typically only available in Japanese. This makes IC cards a more accessible and straightforward option for many foreigners, at least initially.
Despite the initial confusion, IC cards and e-money systems offer a level of convenience that many foreigners grow to appreciate. With just a tap, users can pay for public transport, buy groceries, or even grab a coffee, without needing to handle cash or pull out a credit card. The simplicity of this system becomes particularly useful in fast-paced urban environments, where transactions are expected to be quick and efficient.
Overall, the IC card and electronic money system in Japan is one of the most practical and widely used payment methods. However, for foreigners unfamiliar with prepaid, rechargeable cards and Japan-specific mobile payment apps, it may take some time to fully understand and integrate these methods into daily life.
3. Mobile Payment Apps in Japan
In recent years, mobile payment apps have become increasingly popular in Japan. However, for foreigners, navigating the landscape of Japanese mobile payment systems can be confusing, as it differs significantly from the systems commonly used in other countries. While mobile payment platforms like Apple Pay and Google Pay are gaining traction globally, Japan has developed its own ecosystem of mobile payment apps, with options like PayPay, Line Pay, and Rakuten Pay leading the market.
One of the biggest challenges for foreigners is the limited compatibility of international mobile payment apps. While Apple Pay and Google Pay are available in Japan, their acceptance is far from universal. Many smaller businesses, especially in more rural areas, do not accept these platforms. Instead, Japan-specific apps like PayPay are more commonly used. For foreigners unfamiliar with these apps, this can lead to confusion and frustration when trying to make cashless payments.
PayPay is one of the most widely used mobile payment apps in Japan. It works by linking to a bank account, credit card, or preloaded balance, allowing users to pay by scanning a QR code or tapping their phone at participating stores. For foreigners, the process of setting up PayPay or other similar apps can be difficult, as many of these services require a Japanese phone number and bank account. This makes it difficult for tourists or newcomers to the country to fully utilize these apps without first establishing local financial accounts. Additionally, the user interface is typically available only in Japanese, which can create further complications for non-Japanese speakers.
Another popular app is Line Pay, which is integrated with the messaging app Line, used by millions of people in Japan. Line Pay functions similarly to PayPay, allowing users to pay for goods and services by scanning a QR code or using their Line Pay card. Line Pay is accepted in many places, from convenience stores to large retail chains. However, just like PayPay, it can be challenging for foreigners to set up due to the need for a Japanese bank account and phone number. This can be particularly frustrating for foreigners who are used to the ease of using international mobile payment apps without such restrictions.
Rakuten Pay is another major player in Japan’s mobile payment scene. Linked to the Rakuten ecosystem, it offers cashback incentives and rewards points for users. Foreigners familiar with Rakuten from their home countries may be more comfortable with this platform, but again, setting it up requires a local bank account, and the app is primarily in Japanese. While Rakuten Pay is increasingly accepted at various retail locations, foreigners may find themselves limited in where they can use it, particularly in smaller, cash-preferred businesses.
In addition to the need for local bank accounts and phone numbers, one of the main differences foreigners encounter is the reliance on QR codes for payments. In many other countries, mobile payment apps rely on NFC (near-field communication) technology, allowing users to simply tap their phone at a payment terminal. However, in Japan, many mobile payment systems, including PayPay and Line Pay, require users to scan a QR code or have the cashier scan a code from their phone. This process can be slower and less intuitive for foreigners used to the convenience of tap-and-go payments.
While mobile payment apps are gaining popularity, they still coexist with more traditional payment methods like cash and IC cards. As a result, foreigners may find themselves in situations where mobile payments are accepted in some places but not in others, leading to confusion about when and where to use their apps. For example, PayPay might be widely accepted in large cities like Tokyo or Osaka, but in smaller towns or rural areas, cash or IC cards might still be the preferred method of payment.
The growing popularity of mobile payment apps in Japan shows the country’s slow but steady move toward a cashless society. However, the complexity of setting up these apps, combined with language barriers and the need for local banking, can make it difficult for foreigners to fully integrate mobile payments into their daily lives. Moreover, the inconsistency in where mobile payments are accepted further complicates things, as foreigners must often switch between cash, IC cards, and mobile payment apps depending on the situation.
Despite these challenges, mobile payment apps offer convenience for those who are able to set them up. Users can enjoy quick transactions, loyalty programs, and discounts, which are particularly attractive in Japan’s reward-based retail environment. However, for many foreigners, the learning curve and initial setup can be a significant hurdle in adopting these platforms as a primary payment method.
4. Payment Methods at Restaurants and Stores
For foreigners in Japan, one of the most perplexing aspects of daily life is the variety and inconsistency in payment methods at restaurants and stores. While modern cities like Tokyo and Osaka have adopted a wider range of cashless payment options, many foreigners still encounter confusion when it comes to understanding what payment methods are accepted, particularly in smaller establishments or rural areas.
One of the biggest surprises for foreigners is how much Japan still relies on cash payments, even in restaurants. While many large chain restaurants and popular eateries in urban areas accept credit cards, smaller, family-run restaurants or traditional dining establishments may only accept cash. Foreigners, especially those from countries where card payments are the norm, are often caught off guard by the necessity to carry enough cash (typically in ¥1,000 or ¥5,000 notes) to cover meals. This can be inconvenient, particularly when trying to pay for higher-end meals, as it’s still quite common to settle even large bills in cash. A ¥10,000 bill (about $70) in cash is not considered unusual for a nice dinner in Japan.
However, there has been a growing shift toward accepting card payments, particularly in larger restaurant chains or more modern eateries. Credit cards such as Visa, Mastercard, and American Express are increasingly accepted, but it’s important to note that not all establishments accept foreign-issued cards. Some smaller restaurants may only take Japanese credit cards, which can leave foreigners scrambling for cash. Moreover, tipping is not a custom in Japan, so foreign visitors used to tipping culture must adjust to simply paying the total amount on the bill.
In stores, the situation is equally diverse. Large department stores, supermarkets, and chain retailers generally accept a wide range of payment methods, including credit cards, IC cards (such as Suica or Pasmo), and mobile payment apps like PayPay or Line Pay. Foreigners may find this more in line with their expectations from their home countries, especially in urban centers where cashless payments are becoming more common. However, it’s still advisable to carry cash when visiting smaller shops, specialty stores, or local markets, as these places often prefer or even require cash payments.
IC cards, like Suica and Pasmo, are also widely accepted at convenience stores and some casual dining establishments. For foreigners, these cards can be an incredibly convenient option for paying quickly, especially since they can be easily recharged at train stations or convenience stores. IC cards can be used for small purchases, such as snacks or drinks, in many stores across the country. However, for foreigners who are unfamiliar with these cards, it can be confusing to understand where they are accepted and how to use them for payments beyond transportation. Typically, any place that displays the IC card logo will accept these payments, but foreigners may still feel unsure at first due to the lack of clear instructions in languages other than Japanese.
Mobile payment apps are another option that is gradually gaining ground in restaurants and stores, particularly in cities. Apps like PayPay, Line Pay, and Rakuten Pay are accepted in many locations, especially larger chain stores and restaurants. Foreigners who are used to mobile payments in their home countries may expect these apps to be more widespread than they currently are in Japan. Despite their growing popularity, the reality is that mobile payment options are still not as ubiquitous as they are in countries like China or the U.S., where Apple Pay, Google Pay, and similar platforms dominate the market.
Moreover, setting up mobile payment apps in Japan can be tricky for foreigners. Most mobile payment apps require a Japanese phone number and bank account for full functionality, which can be a significant barrier for tourists or new residents. Furthermore, some apps are only available in Japanese, making the setup process challenging for non-Japanese speakers. Even if foreigners manage to set up a mobile payment app, they may still find that some restaurants and stores do not accept these forms of payment, leading to frustration.
For foreigners who have become accustomed to quick and efficient mobile payments in their home countries, the slower adoption of such technologies in Japan can be surprising. Many are taken aback by the reliance on QR code-based payment systems in Japan, where customers often need to scan a code or show their phone’s QR code to a cashier, rather than simply tapping their phone. This process can feel less intuitive and more cumbersome, especially in comparison to the seamless tap-and-go systems used elsewhere.
Overall, the variety of payment methods at restaurants and stores in Japan can be overwhelming for foreigners. The mixture of cash reliance, the gradual increase in card payments, and the inconsistent acceptance of mobile payment apps all contribute to the confusion. It is not uncommon for foreigners to carry multiple forms of payment, including cash, IC cards, and credit cards, just to ensure they are prepared for any situation. Navigating Japan’s payment systems requires adaptability, and for many foreigners, the challenge lies in figuring out when and where different payment methods are accepted.
5. Bank Transfers and Payment at Convenience Stores
Another aspect of Japan’s payment system that often confuses foreigners is the use of bank transfers and payments made at convenience stores for a variety of transactions, including utility bills, online purchases, and even rent payments. While these methods are common in Japan, they are less familiar to many foreigners, particularly those from countries where online payments via credit cards or mobile payment apps are the norm.
Bank transfers, or “furikomi” (振込), are a widely accepted payment method in Japan. This process involves transferring funds directly from one bank account to another, either via a bank ATM, online banking, or a mobile banking app. Many foreigners are surprised by how often bank transfers are used, especially for payments that might typically be handled by credit card in other countries. For example, it’s common for rent payments to be made through bank transfers rather than automated credit card payments. Utility bills and even some online shopping sites also offer bank transfer options as a standard method of payment.
For foreigners, navigating the bank transfer system can be a challenge, particularly for those who are not familiar with Japanese banking procedures. While most major Japanese banks offer online banking, setting up these services can be difficult for non-Japanese speakers due to language barriers, as most interfaces are only available in Japanese. Additionally, foreigners who are new to Japan may not yet have a Japanese bank account, which complicates their ability to make payments via bank transfer. Even once a bank account is established, the process of making a transfer can be daunting, especially if using an ATM, as the machines often require multiple steps and the correct input of account numbers and branch codes.
Another option for paying bills or completing transactions is through convenience store payment systems, a method that may seem unusual to foreigners but is widely used in Japan. Convenience stores such as 7-Eleven, Lawson, and FamilyMart allow customers to pay for utility bills, taxes, or online shopping purchases in person. When making an online purchase, for instance, customers are often given the option to pay at a convenience store, where they can simply bring a printed receipt or a digital barcode to the store and make the payment in cash. This system is known as “konbini barai” (コンビニ払い), and it is a convenient way to settle bills for those who may not have a credit card or prefer to use cash.
For foreigners, especially those used to automated online payments, the idea of physically going to a store to pay bills can feel inconvenient and outdated. However, for many Japanese people, it is a practical and accessible option, especially for those who do not use credit cards. The convenience store payment system also offers flexibility, allowing people to pay their bills outside of regular banking hours, as convenience stores are open 24/7. Foreigners living in Japan may find this method particularly useful for handling essential payments, such as utilities or phone bills, without needing to navigate the complexities of bank transfers.
One potential drawback for foreigners using convenience store payments is the language barrier, as most of the payment slips and instructions are in Japanese. Additionally, some foreigners may find it strange to pay for significant expenses like rent or large online purchases with cash at a convenience store. For example, a utility bill might cost ¥10,000 (approximately $70), and it’s not uncommon to see people paying for such expenses with cash at a 7-Eleven. For foreigners used to cashless payments, this can feel like an unnecessary complication.
IC cards and mobile payment apps are generally not used for paying bills at convenience stores. Instead, cash is the primary form of payment, although some stores may accept credit cards for certain transactions. Foreigners who are accustomed to using mobile payment apps like Apple Pay or Google Pay might be disappointed by the limited integration of these systems into the convenience store payment process. While mobile payment apps such as PayPay or Line Pay are accepted for purchases at convenience stores, they are typically not used for paying bills or making other large transactions, reinforcing the importance of carrying cash.
For foreigners, adapting to these different payment systems—bank transfers and convenience store payments—can be challenging, especially when combined with language barriers and unfamiliar banking processes. However, once understood, these methods offer flexibility and are well-integrated into Japan’s broader payment culture. For those who are able to open a Japanese bank account, learning to use bank transfers can be a helpful skill, especially when paying for rent, utilities, or services that don’t accept credit cards. Convenience store payments also provide a useful alternative for paying bills at any time of the day, even if the idea of paying in cash might feel unusual at first.
