Emerging Opportunities in Japan’s Cards and Payments Industry: Market Size, Trends and Drivers, Strategies, Products and Competitive Landscape

Synopsis

The report provides market analysis, information and insights into Japan''s cards and payments market, including:

• Current and forecast values for each segment of Japan’s cards and payments market including debit cards, credit cards, prepaid cards and charge cards
• Comprehensive analysis of the industry’s market attractiveness and future growth areas
• Analysis of various market drivers and regulations governing Japan’s cards and payments market
• Detailed analysis of the marketing strategies adopted for selling prepaid cards used by various bankers and other institutions in the market
• Comprehensive analysis of consumer attitudes and their buying preferences for cards
• Competitive landscape of Japan’s cards and payments market

Summary

Japan is the third largest national economy in the world and according to the International Monetary Fund (IMF) had the 25th highest per capita GDP in 2011. The Japanese cards and payments industry registered marginal growth during the review period (2008–2012), with a combined card volume CAGR of 3.79%. The 2011 earthquake affected economic growth, but a positive economic outlook, a need for contactless payment systems and secured technology, the growth of e-commerce, and increasing per capita incomes have facilitated the overall growth of the cards and payments industry. During the review period, the size of the cards and payments industry in terms of volume increased at a CAGR of 3.79% to reach 975 million cards in 2012, while in value terms, the industry valued JPY56.8 trillion (US$713 billion). During the review period, the Japanese cards and payments industry was mainly driven by strong growth in the prepaid cards category, which registered a review-period CAGR of 15.03% in volume terms, increasing from 113.2 million in 2008 to 198.3 million in 2012. The debit cards category registered the slowest growth during the review period, at a CAGR of 0.36%, from 409 million cards in 2008 to 414.9 million in 2012. Overall, Japanese consumer prefers to use cash rather than cards when making purchases.

Scope

• This report provides a comprehensive analysis of Japan’s cards and payments market
• It provides current values for Japan’s cards and payments market for 2012 and forecast figures for 2017
• It details the different macroeconomic, infrastructural, consumer and business drivers affecting Japan’s cards and payments industry
• It outlines the current regulatory framework in the industry
• It details the marketing strategies used by various bankers and other institutions
• It profiles the major banks in Japan’s cards and payments market

Reasons To Buy

• Make strategic business decisions using historic and forecast market data related to Japan’s cards and payments market and each market within it
• Understand the key market trends and growth opportunities within Japan’s cards and payments market
• Assess the competitive dynamics in Japan’s cards and payments market
• Gain insights into the marketing strategies used for selling various types of cards in Japan
• Gain insights into key regulations governing Japan’s cards and payment market

Key Highlights

• During the review period, the Japanese cards and payments industry was mainly driven by strong growth in the prepaid cards category, which registered a review-period CAGR of 15.03% in volume terms, increasing from 113.2 million in 2008 to 198.3 million in 2012.
• The Japanese government has taken steps to clean up the industry through the introduction of Money Lending Control and Regulation (MLCR) in 2010, a set of rules which were designed to regulate industry practices.
• Institutions were forced to check the credit history of people applying for credit cards and loans which exceeded JPY300,000.
• Japan has found a highly successful formula which is increasingly integrating the worlds of e-commerce and traditional retail into a single ‘clicks and mortar’ e-payments environment.
• Over the forecast period, the transaction value of prepaid cards is expected to reach JPY4.1 trillion (US$51 billion), a CAGR of 8.14%.
• The cards and payments industry in Japan is shifting away from magnetic strip-based infrastructure to EMV infrastructure and contactless cards which offer enhanced security. Regional figures released by EMV Co., which sets EMV standards and technical specifications across the world, show a 36% global increase in card usage, making the EMV standard the leading payments system worldwide.

Table of Contents

1 Executive Summary

2 Market Attractiveness and Future Prospects of Cards and Payments Industry

3 Analysis of Japanese Cards and Payments Industry Market Drivers
3.1 Infrastructure Drivers
3.1.1 Increasing acceptance of EMV Cards
3.1.2 Emergence of contactless payments and NFC technology
3.1.3 Wide acceptance of electronic (or “digital”) wallets
3.1.4 Usage of trusted service manager (TSM)
3.1.5 Growing market for smart cards
3.1.6 The role of e-money
3.1.7 Availability of technically advanced security measures
3.1.8 Other infrastructure drivers
3.1.9 Internet penetration
3.1.10 Growing number of ATMs
3.2 Business Drivers
3.2.1 Emergence of mobile commerce
3.2.2 Travel and tourism dynamics
3.2.3 E-Commerce dynamics
3.2.4 Growth in retail industry
3.3 Consumer Drivers
3.3.1 Urban vs. rural population
3.3.2 Consumer confidence index
3.3.3 Overall livelihood index of Japan
3.3.4 Total income growth index
3.3.5 Consumer willingness to buy durable goods
3.3.6 Lifestyle and spending habit
3.4 Card Fraud Statistics
3.5 Regulatory Framework

4 Emerging Consumer Attitudes and Trends
4.1 Consumer Preference
4.1.1 Price
4.1.2 Services
4.1.3 Convenience
4.2 Online Buying Behaviour
4.3 Preferred Payment Methods

5 Competitive Landscape and Industry Dynamics
5.1 Market Share Analysis by Payment Channels
5.1.1 Credit transfer
5.1.2 Cards payments
5.1.3 Check payments
5.2 Debit Cards Market Share
5.2.1 By bank
5.2.2 By scheme
5.3 Credit Cards Market Share
5.3.1 By bank
5.3.2 By scheme
5.4 Charge Cards Market Share

6 Strategies Adopted by Key Players
6.1 Market Entry Strategies
6.2 Product Marketing Strategy
6.2.1 Credit cards

7 Market Size and Growth Potential of Payment Card Industry
7.1 Market Share Analysis Card Type
7.2 Total Size and Forecast of the Japanese Cards Industry
7.2.1 Analysis by number of cards
7.2.2 Analysis by transaction value
7.2.3 Analysis by transaction volume
7.3 Debit Card Category Size and Forecast
7.3.1 Analysis by number of cards
7.3.2 Analysis by transaction value
7.3.3 Analysis by transaction volume
7.3.4 Other key performance indicators
7.4 Prepaid Card Market Size and Forecast
7.4.1 Analysis by number of cards
7.4.2 Analysis by segment – open- and closed-loop cards
7.4.3 Analysis by transaction value
7.5 Charge Card Market Size and Forecast
7.5.1 Analysis by number of cards
7.5.2 Analysis by transaction value
7.5.3 Analysis by transaction volume
7.6 Credit Card Market Size and Forecast
7.6.1 Analysis by number of cards
7.6.2 Analysis by transaction value
7.6.3 Analysis by transaction volume
7.6.4 Other key performance indicators

8 Company Profiles, Product, and Marketing Strategies
8.1 Citibank
8.1.1 Strategies
8.1.2 Credit cards offered
8.2 Japan Post Bank
8.2.1 Strategies
8.2.2 Credit cards offered
8.3 Shinsei Bank
8.3.1 Strategies
8.3.2 Credit cards offered
8.3.3 Prepaid cards offered

9 Appendix
9.1 Methodology
9.2 Definitions
9.3 Contact Us
9.4 About Timetric
9.4.1 Our Approach
9.5 Services
9.6 Disclaimer

List of Tables

Table 1: Japanese Payment Channels (JPY Million), 2008 and 2012
Table 2: Japanese Cards Industry by Type of Card (Thousands), 2008–2017
Table 3: Japanese Cards Industry Size by Volume (Thousands), 2008–2017
Table 4: Japanese Cards Industry Size by Transaction Value (JPY Million), 2008–2017
Table 5: Japanese Cards Industry Size by Transaction Value (US$ Million), 2008–2017
Table 6: Japanese Cards Industry Size by Transaction Volume (Million), 2008–2017
Table 7: Japanese Debit Card Category Size (Thousands), 2008–2017
Table 8: Japanese Debit Card Category Size (JPY Million), 2008–2017
Table 9: Japanese Debit Card Category Size (US$ Million), 2008–2017
Table 10: Japanese Debit Card Category Size by Transaction Volume (Million), 2008–2017
Table 11: Japanese Card Industry Size by Frequency of Use (Transaction/Card/Year), 2008–2017
Table 12: Japanese Prepaid Card Category Size (Thousands), 2008–2017
Table 13:Japanese Open-Loop Prepaid Cards Segment Size (Thousands), 2008–2017
Table 14: Japanese Closed-Loop Prepaid Cards Segment Size (Thousands), 2008–2017
Table 15: Japanese Prepaid Cards Category Size (JPY Million), 2008–2017
Table 16: Japanese Prepaid Cards Category Size (US$ Million), 2008–2017
Table 17: Japanese Charge Card Category Size (Thousands), 2008–2017
Table 18: Japanese Charge Card Category Size (JPY Million), 2008–2017
Table 19: Japanese Charge Card Category Size (US$ Million), 2008–2017
Table 20: Japanese Charge Card Category Size by Transaction Volume (Million), 2008–2017
Table 21: Japanese Credit Card Category Size by Volume (Thousands), 2008–2017
Table 22: Japanese Credit Card Category Size by Transaction Value (JPY Million), 2008–2017
Table 23: Japanese Credit Card Category Size by Transaction Value (US$ Million), 2008–2017
Table 24: Japanese Credit Card Category Size by Transaction Volume (Million), 2008–2017
Table 25: Japanese Credit Card Category Size by Frequency of Use, 2008–2017
Table 26: Japanese Credit Card Category Size by Average Transaction Value (JPY), 2008–2017
Table 27: Japanese Credit Card Category Size by Average Transaction Value (US$), 2008–2017
Table 28: Cards and Payments Key Definitions

List of Figures

Figure 1: Current and Future Prospects of Various Cards in Japan
Figure 2: Growth Potential of The Japanese Cards and Payments Industry by Area of Use
Figure 3: Japanese Cards and Payments Industry Drivers
Figure 4: Japanese Mobile Contactless Payments – Main Players, 2011
Figure 5: NFC deployment in Home Networks (PC and TV), 2008–2012
Figure 6: Members of Felica Networks in Japan, 2011
Figure 7: E-Money Services in Japan, 2010
Figure 8: Contactless Mobile Payments Statistics, 2008
Figure 9: Internet Penetration Rate in Japan (%), 2008–2012
Figure 10: Number of ATMs in Japan (Thousands), 2008–2017
Figure 11: Domestic and Outbound Expenditure on Travel and Tourism (JPY Billion), 2008–2012
Figure 12: Share of Rakuten Group in Japan (JPY Billion), 2007- 2011
Figure 13: Japanese Retail Sales (US$ Trillion), 2007-2012
Figure 14: Japanese Urban and Rural Population (%), 2008–2012
Figure 15: Japanese Consumer Confidence Index, January-2011 – August-2012
Figure 16: Japanese Overall Livelihood Index, January-2011 – August-2012
Figure 17: Total Income Growth Index, January-2011 – August-2012
Figure 18: Consumers Willingness to Buy Durable Goods, January-2011 – August-2012
Figure 19: Japanese Card Fraud Statistics (JPY Million), 2008–2012
Figure 20: Consumer Preferences on Various Types of Cards
Figure 21: Top Five E-retailers in Japan by Volume of Unique Visitors (Million), July 2012
Figure 22: Comparison of Online Shopping Penetration Rate (%), 2007 – 2011
Figure 23: Share of Different Online Payment Options in Japan (%), 2011
Figure 24: Shares of Payment Channels in Japan (%), 2012
Figure 25: Japanese Value and Growth of Credit Transfers (JPY Million), 2008–2012
Figure 26: Japanese Value and Growth of Card Payments (JPY Million), 2008–2012
Figure 27: Japanese Value and Growth of Check Payments (JPY Million), 2008–2012
Figure 28: Japanese Debit Card Category Shares (%), 2011
Figure 29: Japanese Debit Card Category Schemes (%), 2011
Figure 30: Japanese Credit Card Category Shares (%), 2011
Figure 31: Japanese Credit Card Category Shares by Scheme (%), 2011
Figure 32: Japanese Charge Card Category Shares by Scheme (%), 2011
Figure 33: Entry Strategies of Foreign Banks in Japan
Figure 34: Japanese Cards Industry by Type of Card (%), 2008–2017
Figure 35: Japanese Cards Industry Size by Volume (Thousands), 2008–2017
Figure 36: Japanese Cards Industry Size by Transaction Value (JPY Million), 2008–2017
Figure 37: Japanese Cards Industry Size by Transaction Volume (Million), 2008–2017
Figure 38: Japanese Debit Card Category Size (Thousands), 2008–2017
Figure 39: Japanese Debit Card Category Size (JPY Million), 2008–2017
Figure 40: Japanese Debit Card Category Size by Transaction Volume (Million), 2008–2017
Figure 41: Japanese Card Industry Size by Frequency of Use (Transaction/Card/Year), 2008–2017
Figure 42: Japanese Debit Card Use at ATMs and POS Terminals (Million), 2008–2017
Figure 43: Japanese Prepaid Card Category Size (Thousands), 2008–2017
Figure 44: Japanese Open-Loop Prepaid Cards Segment Size (Thousands), 2008–2017
Figure 45: Japanese Closed-Loop Prepaid Cards Segment Size (Thousands), 2008–2017
Figure 46: Japanese Prepaid Cards Category Size (JPY Million), 2008–2017
Figure 47: Japanese Charge Card Category Size (Thousands), 2008–2017
Figure 48: Japanese Charge Card Category Size (JPY Million), 2008–2017
Figure 49: Japanese Charge Card Category Size by Transaction Volume (Million), 2008–2017
Figure 50: Japanese Credit Card Category Size by Volume (Thousands), 2008–2017
Figure 51: Japanese Credit Card Category Size by Transaction Value (JPY Million), 2008–2017
Figure 52: Japanese Credit Card Category Size by Transaction Volume (Million), 2008–2017
Figure 53: Japanese Credit Card Category Size by Frequency of Use, 2008–2017
Figure 54: Japanese Credit Card Category Size by Average Transaction Value (JPY), 2008–2017
Figure 55: Citibank Market Segmentation of Cards Offered
Figure 56: Japanese Credit Card Category Share by Schemes (%), 2011