There is currently a *brutal* battle going on for transitioning customers to app-based payment methods. The Japanese government wants to double, to approximately 40%, the percentage of consumer transactions which use some form of payment rails.
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Banks are pushing credit and debit cards very, very heavily, and convenience stores (which are intrinsically extremely high-volume low-margin businesses) are rolling out or partnering with app-based payment providers, which they believe will save money and gain share-of-spend.
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The primary sales pitches for app-based payment methods are saving time (credit card payments historically take longer to process at Japanese registers than any other payment type; app-based is virtually instant) and saving money via point-back systems or integrated loyalty.
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The subsidization to get installed userbases is *intense*. c.f. Paypay which spent 10 billion yen (~$100M USD) to purchase +/- 3 million users. (This fact is reasonably public; c.f. horse's mouth here: https://about.paypay.ne.jp/pr/pr20190808_01_en.pdf … )
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"Where did all that money come from?" You have to ask which large Japanese tech company splashes 9 figures of USD at a time out of conviction that a new market is going to eventually be massive and they'd prefer to own all of it? ;)
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Who’s leading the charge? In terms of app based ewallet? Mercari Pay, Line Pay, Rakuten Pay and Origami Pay?
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Not sure! My anecdotal impression is PayPay, largely via purchasing market share.
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Question: How did IC cards (Pasmo/Suica et al) become a de facto accepted payment type? That part always confused me, especially how you can't top up those cards with a bank card.
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Ubiquity during the commute (both for transit and at convenience stores at stations and eventually outside of stations) and a sub-second approval time were the big things from my perspective. You can load Suica from a credit card, either integrated option or via e.g. ApplePay.
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Love your localized color commentary alongside your knowledge of the payments space. Just wish the picture was closer up.
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Alrighty, will get you a bigger one later.
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