ELECTRONIC MONEY IN JAPAN - What a mess…
It wasn’t so many years ago that I was actually buying physical rail tickets for my daily commute and fishing coins out of my wallet to pay for things in convenience stores. Now I try to be totally cashless and use my iPhone for everything, and it’s very liberating, but far from perfect…
In an ideal world you would be able to just tap your phone to pay for your transportation, store purchases, restuarant meals and utility bills, and the funds would be removed from your bank account or credit card. In reality it doesn’t always work like that in Japan, and there is no one magical app to cover everything.
Let’s go through the methods I use and explain the problems, inconsistencies and confusion. Much of this should be useful for the visitor to Japan, not just permanent residents like myself.
Transportation
There are basically two main pre-paid contactless smart cards you can use almost everywhere in Japan, on every type of transport. The east has the “SUICA” while the west has the “ICOCA” (that’s the one I use). It doesn’t make any difference which one you get. You can buy these from a machine at any station and then top them up with cash. However, it’s much better to just get the iPhone app versions which you can then add to Apple Wallet, connecting them to your credit cards via Apple Pay. You then just have to tap your (unlocked) phone on the reader as you board whatever transport you’re using, and you can top up at your convenience from the app.
These cards are also useful in that you can use them in many shops such as convenience stores and also get drinks from vending machines, but you do have to keep topping them up, so not too useful for making purchases other than those outlined above.
Shopping
For cashless shopping you really need something that connects directly with a bank account or credit card and is widely accepted, and this is where the problems begin. How about using your credit cards via Apple Pay? Nope. Apple Pay is not very useful in Japan (except for the transport cards mentioned above). You can use credit cards directly in most places, but it’s probably not going to be just tapping the card on a reader, it’s going to be more old school. Personally speaking, I don’t carry credit cards around with me - it’s almost as fiddly as cash.
This where is where QR-code apps come in. The biggest of these is PayPay (not to be confused with PayPal). I’ve been using this for a few years now. It’s good, but has some drawbacks. On the plus side, the app is in English if your phone’s OS is, it’s widely accepted and very simple to use - you top it up with money at your leisure, then the store clerk scans your phone at the register, or online you scan a QR code. I use this for all my convenience store purchases, for some supermarket shopping and for ordering contact lenses on the web, among other things.
However, the fact that you have to keep topping it up can be a real annoyance. Even worse, the method of topping up : in theory you can link your bank account to it (if you’re a resident in Japan), or a credit card, but only if go through a convoluted process of biometric identification involving your ID card and your ugly mug gawping into an iPhone camera. I tried it, but was rejected for unspecified reasons, even though I had all the right documents (tourist can’t even try).
That leaves the only remaining topping-up method - cash. Yep, every couple of weeks I have to walk to a nearby Family Mart or Lawson convenience store and get out some cash from their ATM, then I have to walk to a 7-11 and use their ATM to charge my PayPay app with the cash. Sooooo annoying. (Yes, the 7-11 won’t allow cash withdrawals from my particular bank, and the other two convenience stores can’t top up PayPay).
There are other options, luckilly. I’ve recently started using Rakuten Pay, another phone app, this time connected to Rakuten, which is more or less the Amazon of Japan. This is the second most popular electronic money app in Japan, is widely accepted, and has one big advantage over PayPay - it’s not prepaid, it takes payments directly from your credit card. And - no annoying biometric incomprehensible identity checks necessary! After adding your credit card details, the app contacts the credit card company, who then contact you with a security check in the form of a message to your phone, and it’s all done in a minute or two.
The only downside is that the app is not in English, but apparently the web version can be in English, so that might be the place to set it up.
It has to be said, though, that even armed with these two apps, there are still many places that won’t accept either. Case in point, the big mall chain AEON, which is all over Japan. Many of the shops there, including the supermarket and MUJI, don’t accept PayPay, Rakuten Pay or Apple Pay. You have to use SUICA, or an actual credit card, their own prepaid card thingy (WAON) or…cash!!!! Very, very annoying…
Conclusion
So, going cashless in Japan is a bit tricky. I have to use three different apps and even have to resort to cash sometimes, so be prepared. Have different methods at your dispoal and check carefully what’s accepted before you enter an establishment. It’s always a good idea to keep ¥20,000 cash in your physical wallet as a back up, and in case you lose your phone.