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Payments Regulation in Asia
PUBLIC REPORTING OF CARD FEES
Japan Fair Trade Commission (JFTC) – Credit Card Transactions Survey
The Fair Trade Commission is Japan’s competition regulator, responsible for regulating economic competition and enforcing the Antimonopoly Act.
In 2017 and 2018, the Japanese government approved long-term strategies addressing a variety of key commitments, including “Realizing ‘Society 5.0’” which aims to “advance innovation through the fourth industrial revolution.” 140 One element of the strategy is to “promote cashless economy.” 141 In 2018, the Ministry of Economy, Trade, and Industry built on that principle and formulated the “Cashless Vision” which aims to increase cashless transactions to 40% by 2025. 142 In 2021, the “Growth Strategy Action Plan,” a cabinet decision made in 2021, indicated that high credit card merchant fees was one of the challenges to expanding cashless payments in Japan, specifically citing interchange as one of the highest merchant fees, representing 70% of the total cost. 143 With this context, the JFTC has conducted two surveys of market participants on the subject of credit card transactions. The first survey conducted in 2019 and the second survey from 2020- 2021 (published in 2022) both sought to monitor competition trends in the market and identify trade practices in the credit card market are “likely to be problematic under the AMA and competition policy.” 144 The 2019 JFTC credit card market survey covered the size of the card market, anonymous payment network operator market shares, trends in consumer card usage, trends in merchant card contracts, and competition and contract analysis between network operators and credit card companies (i.e. acquirers, processors, and financial institutions).
The 2022 JFTC credit card market survey covered a similar set of questions to the 2019 survey.
Consistent with the 2019 findings, the 2022 JFTC survey found that none of the five international card brands surveyed published standard interchange fee rates for Japan, citing the risks of disclosing “confidential business information.” 145 This claim stands in contrast to the more than 60 countries in which standard interchange fee rates for one or more of the international brands are disclosed. 146 The report found that disclosure of standard interchange fee rates
140
https://www.mofa.go.jp/files/000272312.pdf
141
https://www.mofa.go.jp/files/000272312.pdf
142 https://www.weforum.org/agenda/2022/09/japan-cashless-society-digital-salary-payment/#:~:text=In%20 2018%2C%20the%20Ministry%20of,possibly%2080%25%20in%20the%20future. 143 https://www.whitecase.com/insight-alert/jftc-market-study-report-credit-card-transactions-suggests-standard- interchange-fee 144 https://www.jftc.go.jp/en/pressreleases/yearly-2019/March/SurveyonCreditCardMarketReport.pdf 145 Pg. 84, JFTC 2022 Credit Card Market Survey 146 https://www.whitecase.com/insight-alert/jftc-market-study-report-credit-card-transactions-suggests-standard- interchange-fee
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