Payments Regulation in Asia - CMSPI Whitepaper

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Payments Regulation in Asia

for multilateral interchange fees is expected to facilitate merchant negotiations with their acquirers and competition among acquirers in the “merchant management market for credit cards as well as non-credit card payment methods.” 147 In September 2022, Ministry of Economy, Trade, and Industry (METI), responsible for enhancing economic and industrial aims of the Japanese government, required the card networks to disclose interchange fees “in order to ensure fair competitive conditions among international brands in the credit card issuance market and raise the transparency of the credit card market as a whole.” 148

Japan Ministry of Economy, Trade and Industry Disclosure of Interchange Rates

In compliance with the September 2022 disclosure requirements, METI maintains links to card network interchange rate tables for Visa 149 , Mastercard 150 , and UnionPay. 151 The rate tables cover only interchange fees for credit card transactions and do not report on debit cards.

ANALYSIS OF PUBLICLY AVAILABLE CARD FEES

There are three primary sources for cost analysis and benchmarking in Japan. The first is disclosed interchange tables by the networks, and the other two are JFTC’s 2019 and 2022 reports on the credit card market. These reports feature reporting on average merchant fees by merchant size and negotiation type. As of 2019, the average merchant discount rate was 3.2%, but there was significant variation across two factors: merchant size and whether the merchant “conducted bidding or compared estimates when signing a merchant contract” (Figures 20 and 21). 152

147

Ibid

148

https://www.meti.go.jp/english/press/2022/0914_002.html

149

https://www.visa.co.jp/about-visa/interchange-fees.html

150 https://www.mastercard.co.jp/content/dam/public/mastercardcom/jp/ja/documents/interchange_master- card_creditcard.pdf 151 https://www.unionpayintl.com/en/IRF/pdf/Japan%20IRF.pdf 152 https://www.jftc.go.jp/en/pressreleases/yearly-2019/March/SurveyonCreditCardMarketReport.pdf

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