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Beyond the Transaction: Every Transaction Has a Story

Eight Insights into the Japanese Consumer


At MasterCard Japan, we are dedicated to developing and bringing to market better payment solutions. There is abundant evidence that if you make the payment experience safer, easier and/or more rewarding, you are likely to see a change in consumer behavior.

Recently, we asked 1,000 Japanese consumers to share their views on the subject of payment safety and related issues. Here’s what they said.

Cash feels safe. That explains why 8 in 10 consumer-to-business transactions are in cash. The majority of Japanese consumers still fail to grasp the costs of cash – from getting it at an ATM to securing it and frequent cash users failing to recognize the superior protections afforded to lost credit cards versus lost cash.

Technology for technology’s sake isn’t enough. The introduction of an early version of a digital wallet in 2004 – a decade before Apple Pay – didn’t resonate because it didn’t solve any problems – nothing was measurably safer, easier or more rewarding. Today, Apple Pay is generating much more excitement given its potential to delivery on all those three areas.

Consumers are willing to switch when technology adds value. That was borne out in 2000, when contactless transit payment cards were introduced. The cards offered no reward or discount, but they did offer ease. And they made it simpler, easier, and faster to board a bus or train – a solution that in a very short period of time was adopted by an overwhelming percentage of Japan’s transit riders.

Payment certainty at the time of checkout for traditional retail or upon delivery for e-commerce is a critical factor for Japanese consumers.

Overspending is a big concern. Traditional Japanese banking and related consumer behaviors produce a system where it is very common for most families to keep the majority of their investable funds in the main bank account. Many Japanese are therefore reluctant to use debit cards, worrying that any error might put their life savings at risk. MasterCard’s leading technology including alerts and spending controls can give Japanese consumers much greater control and peace of mind which is why we’re seeking to deliver that as part of any domestic debit program.

Consumers trust e-money – that is, prepaid cards. Consumers like the idea of putting a fixed amount of money onto a card. To consumers, prepaid cards seem safer because they can’t spend more than the amount loaded onto the card.  Now that MasterCard prepaid cards are available, consumers are appreciating that they can use the cards anywhere and even get rewards and promotions not offered by transit e-money.

Prepaid cards such as MasterCard’s “au wallet” have “checked all the boxes.” Consumers are responding in record numbers to our recent launch of this card, which has the added safety of being prepaid, and is easier and more rewarding that than e-money given global acceptance and program benefits.

“Safety” can also include “privacy”.  Japanese consumers place a very high value on privacy and cash’s last stronghold is its anonymous nature.  We’re not giving in to cash and we are currently developing a prepaid card that while KYC-compliant will shield the identity of the cardholder by removing it from the card itself.

Electronic payments are steadily gaining share in Japan – which while slow-growing remains one of the world’s largest in terms of personal consumption expenditures (PCE).  MasterCard Japan is seizing upon digital convergence, increased globalization and recent technologies to help accelerate this growth past a “tipping point” where Japan can soon join the ranks of other highly-developed economies with the majority of PCE conducted electronically.  Fundamental to our success will be our deep understanding of how Japanese consumers perceive and experience their payment solutions.

This article first appeared in BankIT Asia on 22 January 2015.

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