Hello everyone, I'm Mog!
Have you ever visited Japan and been surprised to find that cash payments are still so common?
Many of you have been finding this blog "Here in Japan" by searching for terms like "cashless" and "payment."
I wrote about cashless payments in Japan back in 2024 — so now, in 2026, let me share how things have changed, along with my personal experience and Japan's unique loyalty point card culture.
📊 How Far Have Cashless Payments in Japan Come?
Japan Was Once a "Cash-Only" Country
Not long ago, Japan had one of the lowest cashless payment rates among major countries. In 2021, the rate stood at just around 30% — far behind other developed nations like South Korea and the UK, where rates ranged from 50% to over 90%.
2025 Update: Japan Finally Hits 58%!
But cashless payments in Japan have come a long way.
According to data released by Japan's Ministry of Economy, Trade and Industry (METI) in March 2026, the cashless payment rate in Japan reached 58.0% in 2025, with a total transaction value of 162.7 trillion yen.
That's nearly double the 30% recorded in 2021 — all within just four years.
Here's a breakdown of cashless payments in Japan by type:
- Credit cards: 82.7% (134.6 trillion yen)
- QR code payments (e.g., PayPay): 10.2% (16.6 trillion yen)
- Electronic money: 3.7% (6.0 trillion yen)
- Debit cards: 3.4% (5.5 trillion yen)
Source: METI, "Cashless Payment Ratio for 2025," March 31, 2026
https://www.meti.go.jp/press/2025/03/20260331006/20260331006.html
QR code payment services like PayPay have seen especially strong growth — up 25% year-on-year — and are now accepted even at small local shops and independent stores.
Next Target: 65% by 2030, and Eventually 80%
The Japanese government had previously set a goal of reaching 40% cashless by 2025 — a target it surpassed with ease, achieving 58%.
The new targets are now 65% by 2030, with an ambitious long-term goal of 80% (domestic benchmark).
🃏 "Do You Have a Point Card?" — Japan's Unique Loyalty Point Culture
What's Inside a Japanese Wallet?
Have you ever been asked "Do you have a point card?" when paying at a store in Japan?
You can't talk about cashless payments in Japan without talking about its unique "point culture."
Supermarkets, drugstores, cafés, bookstores — just about every shop has its own loyalty point card.
Collect enough points, and you can get discounts or other perks.
According to a 2023 survey of 3,032 men and women across Japan, 87.1% of people said they own at least one point card — that's nearly nine out of ten people. Quite surprising, isn't it?
On top of that, about one in four people (25.3%) carries six or more point cards.
My own wallet used to be stuffed full of cards 😅
I started keeping the ones I rarely used at home, but that meant I'd often forget to bring them when I stopped by a shop on the way home — and I'd feel a little cheated for missing out on points. Eventually, the hassle got to me, and I stopped signing up for new cards altogether.
This kind of frustration may be why, alongside the shift to cashless payments, more and more stores have been switching from physical point cards to smartphone apps.
The same survey found that 49.1% of respondents prefer app-based point cards — which honestly makes a lot of sense.
Source: infoQ, "Which Point Card Do You Recommend?
A Survey of 3,000 People on How to Choose and Use Points," June 2023
https://infoq.jp/qplus/archives/107
That said, apps bring their own challenges. At the register, I have to open the point app first, then switch to my payment app — and with so many apps on my phone, finding the right one quickly isn't always easy. When the line is backing up behind me, the pressure is real 😅
Still, I make sure to collect those points 🤭 Just the other day, I'd finally accumulated enough points at my favorite Japanese sweets shop for a 500-yen discount 💕
My Own Cashless Journey
My Hesitations Before Going Cashless
I only started using cashless payments around 2024 — fairly late, I know.
My main concerns were:
- I might overspend if paying feels too easy.
- Managing my budget could get complicated with a mix of cash and cashless.
- There are so many payment options — I wasn't sure which one to go with.
The Power of Points
What finally convinced me was a friend telling me that cashless payments earn you points that add up to a surprisingly decent amount.
I suspect a lot of people made the switch for the same reason.
A cashback rate of 0.5% to 1.0% might not sound like much, but it adds up.
For example, if you spend 30,000 yen per month on cashless payments, you'd earn around 150–300 yen in points each month. Over a year, that's 1,800–3,600 yen — enough for a casual lunch or a few cups of coffee ☕
Avoiding Overspending
Because cashless payments are so seamless, it's easy to lose track of how much you're spending.
To stay on top of it, I use a household budget app and enter every purchase on my phone as I go.
Which Payment Method to Use
The options vary from store to store, but PayPay seems to be accepted at the widest range of places.
Most stores display icons near the register showing which payment methods they accept — so I check those in advance or ask a staff member. (Still a bit of a hassle, honestly 😅)
Reference: Times PAY — Credit and Electronic Money Payment Service by Times
Where Cash Is Still Required
Even as cashless payments in Japan continue to grow, there are still places where cash is the only option:
- Local restaurants and long-established eateries, especially in rural areas
- Offerings at shrines and temples (though some are starting to accept cashless payments)
- Some vending machines
- Shops in areas with a large elderly population
Just in case, I always keep my wallet with me when I go out.
Otoshidama
One moment that really showed me the unique possibilities of cashless payments was during the New Year holidays.
I sent otoshidama — the traditional New Year's monetary gift given to children in Japan — to my nephew via digital payment, since we weren't able to meet in person.
When he tapped the image of the otoshidama envelope on his phone, a message from me appeared. It was such a thoughtful touch, and it genuinely warmed my heart 💕
✨ Wrapping Up
Cashless payments in Japan have nearly doubled in just four years — a remarkable shift for a country once known for its love of cash.
Behind that change is Japan's deeply rooted point culture: the idea of "earning while you spend" has helped push many people toward going cashless.
That said, cash is still a must in some situations — so if you're visiting Japan, make sure to bring some with you!
Have a wonderful day 💕
▶ Further Reading
Curious about otoshidama and how the Japanese New Year is celebrated?
Check out this article 👇
