Japan Profile: Cashless Payment Growth Slowed by Ageing Population

23 Nov, 2020 . 4 minutes



The way Japan’s consumers pay for goods and services is changing - in spite of a large ageing population that prefers to use more traditional methods of payment and communication. Japan's population was 126.8 million at the end of 2019 with 12 percent aged below 15, 59.5 percent between 15 years and 64 years and 28.5 percent 65 and older. In spite of being at the forefront of many digital innovations ecommerce growth has been comparatively slow as a result of the ageing population.

However, there are signs cashless payments will become mainstream in the future. The Ministry of Economy, Trade and Industry is encouraging businesses to offer more cashless options to boost domestic spending and to keep the country competitive internationally. Japanese primarily use cards for online shopping, according to spending data. Bank-account penetration is currently 98.2% and card payments hold a 65 percent share of a total ecommerce market that records annual sales of $97.6 billion and is expected to experience compound annual growth of 3 percent in 2021, data show.

Internet penetration has risen to 90.9 percent but the mobile commerce annual growth rate is expected to expand at 13.6 percent only in 2021 to $60.8 billion, data show. Mobile commerce uptake remains relatively low with a 46.8 percent gain in smartphone penetration.




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