5-5-2024 (TOKYO) Tourists visiting Japan from Singapore and seven other Asian nations will soon enjoy streamlined payment experiences as Japan unveils a new joint payment scheme, facilitating transactions through local QR code wallets.
Under the initiative, Japanese travellers will reciprocally have the convenience of utilising QR code payments for various services, including meals at Singaporean hawker stalls.
Japan aims to roll out the scheme in time for the Osaka World Expo, slated to commence on April 13, 2025. Efforts are underway to align Japan’s JPQR payment system with the unified standards of eight other countries.
These nations include Singapore (SGQR), Malaysia (DuitNow QR), Indonesia (QRIS), the Philippines (QRPh), Thailand (Thai QR Payment), Cambodia (KHQR), Vietnam (VietQR), and India (BharatQR).
However, Japan faces the pressing challenge of boosting the usage of its JPQR system, currently operational in just 15,000 businesses across the country, predominantly small enterprises with limited foreign tourist foot traffic.
Mr Kenichi Matsuguma, director of the cashless payment promotion office at Japan’s Ministry of Economy, Trade, and Industry, explained, “One single QR code in a store can process payments from multiple payment operators across Asia.”
JPQR will seamlessly integrate with a variety of Japanese and foreign payment wallets. For instance, Singaporean visitors to Japan can employ platforms such as GrabPay or PayNow for JPQR payments.
Nevertheless, Mr Matsuguma acknowledged the necessity of persuading more Japanese businesses to adopt JPQR, citing the potential influx of foreign visitors as a catalyst for its widespread adoption.
Japan has lagged behind ASEAN countries in transitioning to cashless transactions. In 2022, ASEAN nations including Singapore, Indonesia, Thailand, Malaysia, and the Philippines initiated a pact to unify their QR code payment systems.
Although Japan witnessed a surge in cashless transactions in recent years, comprising 39.3% of all transactions in 2023, the figure still falls short of neighbouring China and South Korea’s adoption rates.
Mr Matsuguma outlined Japan’s goal of achieving 40% cashless transactions by 2025, with an eventual target of 80%, albeit without a specified timeline for the latter objective.
In 2023, credit card payments dominated Japan’s cashless transactions at 83.5%, while QR code payments across various payment wallets constituted 8.6%.
The prevailing QR code payment method in Japan, termed “consumer-presented mode” (CPM), is employed at millions of establishments, including convenience stores and restaurants.
Conversely, the JPQR-unified QR code operates under “merchant-presented mode” (MPM), akin to Singapore’s SGQR. This mode necessitates consumers to scan a retailer’s QR code and manually input the purchase amount.
While both modes offer advantages, the CPM incurs higher setup costs and transaction fees. In contrast, the MPM requires minimal setup costs but involves manual billing amount verification, which may be less efficient.
The Payments Japan Association aims to expand JPQR acceptance to at least 100,000 stores by the joint QR code payment system’s launch. The association intends to bolster awareness and actively advocate for JPQR adoption among businesses nationwide.
