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Ant Financial says it has connected 2m merchants in Japan to the Alipay+ network, as the service continues to expand despite the country’s largely cash-based economy.

Alipay+, the cross-border mobile payments platform, has made significant inroads into the Japanese market, which may boost merchants serving foreign tourists in the upcoming “sakura” cherry blossom season.

As a result of partnerships with more than 40 local acquirers, the total number of merchants that can accept Alipay+ payments in Japan now numbers more than 2m.

Douglas Feagin, president of Ant International, said the local acquiring partners of Alipay+ in Japan range from large financial institutions to start-ups with only “several” employees.

“By working with these partners, Alipay+ provides global tourists with a seamless digital payment experience that is the same as in their own markets,” he said.

“Without any extra effort, tourists can make purchases by simply scanning the QR code at merchants of all sizes, without worrying about foreign currency exchange or language barriers.”

In a  shared with 91����ԭ��, Ant Group said there are now 16 digital wallets and bank apps that are accepted by merchants in Japan via Alipay+.

Transaction volumes made by Alipay+ payment apps in Japan more than tripled in the first three weeks of March 2024, compared with the same period in 2023, Ant Group said.

From souvenir shops to department stores

The new payment channels opened up by Alipay+ are benefitting both large and small merchants throughout Japan, particularly in tourist destinations.

In Asakusa, a souvenir and street food hotspot in Tokyo’s old town, monthly transaction volumes on Alipay+ have increased fivefold (on average) since merchants connected to the network, according to Ant Group.

Meanwhile, some larger merchants are seeing even faster growth in transaction volume via Alipay+.

Daimaru Matsuzakaya Department Stores, one of Japan’s largest department store chains, said that in the first two months of 2024, the volume of transactions it had received via Alipay+ increased tenfold compared with the same period last year.

Akito Kimura, manager of inbound business at Daimaru, said the department store had initially partnered with Alipay to “make Chinese customers feel more at home” and is now taking payments from countries throughout Asia.

Online payments made easier

Alipay+ can be used for app-based services such as ride-hailing, as well as for in-store payments, which together have led to a “surge” in transaction volume and value from Hong Kongers in Japan, said Venetia Lee, CEO of AlipayHK.

In Q1 2024, AlipayHK users made 3.5 times more transactions in Japan and spent five times more in value terms than in the previous quarter.

“Japan is the first foreign destination of AlipayHK, as it is one of the favorite travel destinations for Hong Kong residents,” she said.

“I am confident that the usage of AlipayHK will continue to grow in Japan on the back of the strong adoption of Alipay+ services among Japanese merchants.”

Japan moves rapidly towards cashless payments

The growth of Alipay+ in Japan is all the more impressive in light of Japan’s mostly cash-based economy.

In 2023, according to the , cashless transactions made up 39.3 percent of the total value of payments in Japan.

In April 2018, the METI introduced its Cashless Vision, aiming to increase the share of cashless payments to 40 percent of all payments by 2025.

As noted by METI, the total percentage of cashless payments has already tripled since 2010, when it was less than 10 percent, and is on track to hit 40 percent in 2024.

Japan’s slow adoption of cashless payments is something of an outlier among developed economies.

In 2021, according to the , Japan made 104 cashless payments per capita, compared with 746 in Singapore, 679 in South Korea and 640 in Australia.

������covered by 91����ԭ��, the Japanese government has previously offered incentives for consumers to go cashless, including 2 to 5 percent rebates on electronic transactions.

With merchants in Japan increasingly accepting digital payments, the foundations for Japan to continue to increase its total share of cashless transactions are now well established.