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Payments Regulation in Asia
Despite the convenience offered by Near Field Communication (NFC) technologies, which have been in use since the early 2000s for transportation payments, many of the new cashless payment services rely on QR codes. This method requires users to open an app and scan a code to complete transactions, a process that some find cumbersome compared to the simplicity of NFC taps. The reliance on QR codes has presented an uphill battle for new services trying to provide a seamless user experience and compete with established NFC payment methods that are favored for their convenience. Government Initiatives and Security Concerns: Government efforts to promote cashless payments and the challenges faced by new QR code services are crucial aspects of this transition. As a result of the 2018 push to build a cash-free society, the government developed a unique QR code system that was compatible with 11 QR codes upon release. 166 Known as JPQR, the solution is aimed at accelerating the promotion of mobile payments in Japan by creating a unified and standardized QR code, with merchants applying for a JPQR code online. 167 In addition, the Japanese government is discussing international expansion of JPQR that will link the current domestic solution to global payment providers this year. This move would represent a continuation of a 2022 agreement between five ASEAN member states (Singapore, Thailand, Malaysia, Indonesia and the Philippines) to create unified QR code payment systems. 168 Above QR code standardization, to overcome consumer reluctance and stimulate adoption, several mobile payment services have launched aggressive marketing campaigns. PayPay, for example, launched a significant campaign offering a 20% cashback on all payments, with some lucky users receiving 100% back. This campaign was so successful that the allocated 10-billion-yen budget was exhausted in just 10 days, dramatically increasing the service’s user base. In response to rising competition for customer retention, leading mobile payment services LINE Pay and Merpay formed the Mobile Payment Alliance, aiming to increase adoption by simplifying implementation for stores and offering more integrated services. The alliance, now joined by NTT Docomo, aims to leverage the widespread use of LINE’s chat app and Mercari’s auction platform to gain a competitive edge. Despite these efforts, the future of mobile payments in Japan remains uncertain. Consumer hesitation towards QR code-based apps persists, and the industry is yet to find the perfect formula for widespread adoption. The focus for mobile payment providers is now on innovation, aiming to win over consumers with secure, seamless, and convenient payment solutions.
166
https://m.unionpayintl.com/en/mediaCenter/newsCenter/companyNews/6449.shtml
167
Ibid
168
https://www.techinasia.com/japan-integrate-qr-payment-southeast-asia-2025
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