For years, Japan was known as the country that stubbornly held onto cash. Even as neighbors like China and South Korea sprinted toward mobile payments, Japan's cash-in-circulation climbed to 23% of GDP by 2022 which is the highest among of any developed economy. As recently as 2010, only 13% of transactions were cashless.
The narrative of Japan as a digital laggard, however, has always been incomplete.
Japan invented the QR code by Masahiro Hara in 1994.
It launched one of the world's first real-time payment systems called Zengin System.
Sony's FeliCa NFC technology powered the Suica and Pasmo contactless cards in the early 2000s.
Japan was not lacking innovation. It was lacking the push to deploy it at scale.
That push came. And once it did, the acceleration was remarkable.
The turning point arrived around 2018, when the government formulated the "Cashless Vision" with a target of 40% cashless adoption by 2025. The "cashless payment wars" erupted. PayPay, LINE Pay, Rakuten Pay, and others competed aggressively for market share with cashback campaigns and merchant incentives. COVID-19 accelerated the shift further, as hygiene concerns pushed even reluctant consumers toward contactless payments.
By 2024, Japan's cashless ratio hit 42.8%, surpassing the government's target ahead of schedule. PayPay alone reached over 70 million users. The 2025 Osaka World Expo became the first world's fair in history to go entirely cashless.
The pattern is clear. Japan's adoption curve does not follow a straight line, but more of a hockey stick. Slow buildup, sudden acceleration, and deep institutional commitment once the tipping point arrives.
Stablecoins are next.
