Japan, a country that seamlessly blends futuristic technology with deep-rooted traditions, has seen rapid adoption of cashless payment methods in recent years. While cash was once considered king, credit cards, IC cards, and QR code payments are now widely used, especially in urban areas. However, for travelers, understanding how to handle Japanese yen and make the most of available payment options is key to a smooth experience.
This guide provides practical advice on using credit and debit cards, navigating ATMs, leveraging WISE cards, and adopting digital payment methods. For a more comprehensive look at Japan’s travel challenges, check out this guide on common challenges for tourists traveling in Japan.
What is the Japanese Currency?
The Japanese yen (¥) is Japan’s official currency and one of the most traded currencies globally.
Denominations
- Coins: Available in 1, 5, 10, 50, 100, and 500 yen.
- Banknotes: Commonly used notes include 1,000, 5,000, and 10,000 yen.
Globally, the yen accounted for 16.7% of foreign exchange transactions in 2022, its lowest share historically, but it remains the third most traded currency worldwide (Ministry of Finance, Japan, 2022).
While cash is still used in some situations, contactless payments, credit cards, and IC cards dominate daily life in Japan’s cities. Carrying a small reserve of yen (e.g., 20,000 yen) is sufficient for emergencies or cash-only transactions, such as topping up an IC card.
Why Cash is No Longer King in Japan
Contrary to the outdated belief that Japan is a cash-dominated society, cashless transactions have become the norm throughout Japan.
Growing Use of Cashless Options
- Credit Cards and Debit Cards: Widely accepted throughout Japan, including restaurants, convenience stores, and large shopping centers.
- QR Code Payments: Popular apps like PayPay, Rakuten Pay, and Line Pay are commonly used in retail and dining establishments.
- IC Cards: Cards such as Suica and Pasmo are indispensable for public transportation and are accepted in most transactions. They are especially useful when used at vending machines and convenience stores.
While travelers should carry some cash (e.g., 20,000 yen) for emergencies or specific situations like topping up an IC card, cash is no longer the dominant payment method.
Credit Cards in Japan: Are They Accepted Everywhere?
Credit cards are widely accepted in Japan. However, limitations may exist depending on the type of establishment or card.
Where Can You Use Cards?
- Restaurants and Retail Stores: Most mid-range and high-end establishments in cities accept Visa, Mastercard, and JCB.
- Convenience Stores: Chains like 7-Eleven, Lawson, and FamilyMart accept contactless payments and major credit cards.
- Public Transportation: IC cards linked to credit cards are a convenient way to pay for trains and buses.
However, certain small businesses and reputable restaurants that don’t want to incur the transaction fees associated with accepting credit card payments may not accept credit cards, making a cash reserve essential for travelers venturing off the beaten path.
A Smart Solution for Tourists: Using a WISE Card
For travelers looking to avoid high currency exchange fees and the hassle of carrying large amounts of cash, the WISE card (formerly known as TransferWise) is a convenient and cost-effective solution.
Why Choose a WISE Card?
- Low Conversion Fees: WISE offers some of the best exchange rates, with transparent fees that are significantly lower than traditional banks or airport currency exchanges.
- Ease of Use: Load funds onto your WISE card through the app and withdraw yen directly from 7-Eleven, Lawson, or Japan Post ATMs.
- Global Usability: The card supports multiple currencies, making it versatile for travel beyond Japan.
How to Use a WISE Card in Japan
- Load Funds: Add money in your home currency via the WISE app.
- Find an ATM: Use international-friendly ATMs, such as those in convenience stores or post offices.
- Withdraw Cash: Insert your WISE card, select “Checking” or “Credit,” and withdraw yen as needed.
By using a WISE card, travelers can avoid unnecessary fees while maintaining financial flexibility in Japan’s evolving cashless landscape.
Digital Payment Methods Standard for Locals: Suica, Pasmo, and QR Code Systems
Digital payment methods are now a significant part of daily life in Japan. Suica and Pasmo, originally designed for public transportation, are increasingly used for small transactions.
Benefits of Digital Payments
- IC Cards: Suica and Pasmo are not only used for transport but also for purchases in vending machines, convenience stores, and cafes.
- QR Code Payments: Apps like PayPay, Line Pay, and Rakuten Pay are widely accepted in restaurants and retail shops. Some apps accept tourists to open an account. You can top up at convenience stores or even send money from your Wise account.
- Contactless Credit Cards: Many stores now accept RFID-based payments for added convenience.
Currency Exchange Tips: Where to Get the Best Rates
Getting the most value when exchanging money is essential for managing your travel money efficiently.
Best Practices
- Withdraw yen at ATMs with WISE card: Multi-currency WISE card allows travelers to withdraw local currencies, including yen, with automatic conversion at the real market rate.
- Avoid Airports: Currency exchange counters at airports often offer less favorable rates compared to ATMs or city-based exchange services.
IC Cards for Travelers: Convenient Payments for Transportation and More
For travelers navigating public transportation, IC cards like Suica and Pasmo are indispensable. These cards can also be used for purchases at convenience stores, vending machines, and certain shops.
Key Features of IC Cards
- Rechargeable: Top up at train stations or convenience stores.
- Secure and Convenient: No need to carry loose change or small bills.
- Additional Functions: Smartphone apps like Mobile Suica provide even more flexibility by linking to credit cards.
Note: While IC cards are a convenient payment method in Japan, topping up typically requires cash, which makes carrying a small reserve of yen important.
Key Takeaways
- Cashless is Common: Urban Japan now favors credit cards, IC cards, and QR code payments, making cash less necessary for everyday transactions.
- Carry Some Cash: While cash is rarely needed, a reserve of yen (e.g., 20,000 yen) is useful for emergencies or specific cases, such as topping up an IC card.
- Know Your Payment Options: Familiarize yourself with digital payment systems like Suica, PayPay, and Rakuten Pay.
- ATMs Are Reliable: Use trusted ATMs at 7-Eleven and Japan Post for foreign card compatibility.
- Plan for Rural Areas: In remote locations, cash may still be required, so always prepare accordingly.
For a comprehensive guide on handling money in Japan and additional travel tips, check out this article on common challenges for tourists.