56
Payments Regulation in Asia
0.70%
0.60%
0.50%
0.40%
0.30%
0.20%
0.10%
0.00%
<50 Mn yen 50-100 Mn yen
100-200 Mn yen
200-500 Mn yen
500 Mn-1 Bn yen
1-10 Bn yen 10+ Bn yen Overall
Figure 21. Average Difference Between Merchants Not Conducting Network Bidding vs. Those Conducting Network Bidding by Merchant Size (2019) 154
While Japan previously had a 3.25% interchange cap on credit card fees and a government-subsidized points program to offset the cost of the national sales tax increase from 8% to 10% in 2019 155 , due to significant pushback from the credit card industry, lawmakers reversed their stance, allowing card companies the discretion to decide whether or not to uphold the cap. 156 As no interchange cap or co-badging mandates currently exist in Japan, the card networks are unfettered in their ability to price merchant fees. According to merchant findings from the 2019 survey, “until several years ago, there were negotiations for lowering the merchant discount fees. However, it appears that the merchant discount fees have been reduced to the limit and there have been no such negotiations in the past few years.” 157 In the 2022 survey, reporting indicates costs have come down significantly, with overall merchant commissions falling to 2.70% (Figure 22). 158 This reduction of cost may be attributed to changes in Japan’s payments policy since 2019. In particular, as part of its goals to achieve 40% cashless payments by 2025, the Ministry of Trade and Industry (METI) has been providing government grants to cover the cost of purchasing or leasing
154
https://www.jftc.go.jp/en/pressreleases/yearly-2019/March/SurveyonCreditCardMarketReport.pdf
155
https://asia.nikkei.com/Economy/High-credit-card-fees-threaten-Japan-s-push-to-go-cashless
156
Ibid
157
https://www.jftc.go.jp/en/pressreleases/yearly-2019/March/SurveyonCreditCardMarketReport.pdf
158
https://www.jftc.go.jp/houdou/pressrelease/2022/apr/220408.html
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