Payment Systems
(1) Payment Practice in Japan
Cash is still the most widely used form of payment by individuals in Japan, though plastic cards (credit cards, debit cards, pre-paid cards, etc.) have been steadily gaining in popularity. Checks, together with promissory notes and bills of exchange, are mostly for corporate use. Direct credit into the payee’s bank account is also widespread. Both individuals and corporations use banks regularly to transfer funds to recipients, and monthly salaries are directly paid into employee bank accounts by the employer. Direct debits from bank accounts are the predominant means of payment for regular household payments such as telephone, electricity, tax and other bills.
Ordinary deposit accounts play an important role. They function as the household’s wallet at the bank. The frequent use of this account and its use with overdraft service against fund shortfalls, make it an almost essential element of Japanese payment practices. A depositor can withdraw cash from, or deposit cash to, his/her ordinary deposit account using CD/ATM machines, and direct credit/debit is primarily done to/from an ordinary deposit account.
(2) Interbank Payment Systems
The systems for interbank payments (clearing and settlement) in Japan can be divided into private-sector clearing networks (the check-clearing houses, the domestic funds transfer system and the foreign exchange yen clearing system), which are operated by the Tokyo Bankers Association (TBA), and the BOJ-Net, which is operated by the BOJ.
The networks of CDs and ATMs are also important electronic payment mechanisms in Japan. Banks and other depository institutions construct their own CD/ATM networks and the networks are linked to one other through the MICS central system.
Interbank Payment Systems in Japan
- Notes:
- (1) Settlement at the Bank of Japan accounts
- (2) The service provides on-line processing of the government-bond delivery for secondary market transactions as well as bidding for newly issued government bonds.
- (3) Total transactions of all ten networks illustrated below
CD/ATM Networks
- Notes:
- (1) Figures in parentheses represent the number of CDs and ATMs installed as of the end of March 2009.
- (2) Citibank’s CD/ATM network is connected to BANCS.
Please see JBA Booklet "Payment Systems in Japan" (pdf format,1552KB)
