Japan payment scheme economics matrix

TL;DR

Japan retail payment now runs on four parallel scheme classes — card (Visa / Mastercard / JCB / Amex / Diners), code (PayPay / d払い / au PAY / 楽天ペイ / メルペイ / FamiPay), account-to-account (Bank Pay / J-Debit / Cotra), and prepaid electronic money (Suica / PASMO / WAON / nanaco / Edy). Each sits on a different license stack, a different settlement venue, and a different fee economy, so consumer-visible UX similarity hides material differences in who funds the points, who eats the chargeback, and who controls the merchant relationship. This entry is the side-by-side comparison page that other payments index entries point to when a reader needs to see all four economic stacks at once.

Wiki route

This sits under payments index as the cross-scheme reference page. Read it alongside Japan cashless landscape for the market-share view, card role split and interchange and merchant fee stack for card-class detail, code-payment competitive map for wallet-class detail, A2A payment route for bank-direct detail, and funds-transfer vs prepaid boundary for the wallet / prepaid line. License routing for all four classes is in Japan payment license stack.

Four-class scheme map

The four classes do not differ mainly in how the consumer taps, scans, or holds a card — they differ in the balance layer the value moves through and the license route the operator carries.

Class	Examples	Balance layer	Primary license route
Card payment	Visa, Mastercard, JCB, Amex, Diners	Issuer credit line (post-pay)	Installment Sales Act (信販 / 包括信用購入あっせん) + brand rules
Code payment	PayPay, d払い, au PAY, 楽天ペイ, メルペイ, FamiPay	Funds-transfer balance / prepaid sub-balance / card-link / bank-debit (mixed)	Funds Transfer Service + Prepaid Payment Instrument (Payment Services Act)
Account-to-account (A2A)	Bank Pay, J-Debit, Cotra-linked apps	Bank deposit account (direct debit)	Banking Act + JEPPO infrastructure + electronic payment agency (電子決済等代行業) where third-party
Prepaid electronic money	Suica, PASMO, WAON, nanaco, Edy	Prepaid stored value (closed-loop or quasi-open)	Prepaid Payment Instrument (Payment Services Act)

Each class has a scheme operator (the entity that owns the network rules and settlement venue) and a license under Japan law that determines what consumer-protection rules, fund safeguarding, and refund mechanics apply.

Scheme operator and settlement venue

Class	Scheme operator pattern	Where money actually settles
Card	International brand (Visa / Mastercard / Amex / Diners) or domestic brand (JCB); 4-party scheme separates issuer / acquirer; 3-party scheme (Amex / Diners / some JCB cards) collapses them into one	Issuer ↔ acquirer settlement through brand-rules clearing; net positions ultimately move through the banking system (often via Zengin / BOJ-NET for yen legs)
Code	Wallet operator (PayPay Corp, NTT docomo, KDDI, Rakuten Pay, Mercari, etc.); the wallet operator typically owns the merchant contract OR delegates aggregation to a QR-gateway PSP such as Netstars	Internal wallet ledger first; periodic net settlement to merchant bank account through Zengin transfer
A2A	JEPPO for Bank Pay / J-Debit; Zengin-Net + Cotra system for instant P2P-and-merchant transfers	Direct deposit-account debit; final settlement clears twice-daily through Zengin / Cotra batch windows
Prepaid e-money	Issuer (JR East for Suica, PASMO Co. for PASMO, AEON for WAON, Seven Card Service for nanaco, Rakuten Edy for Edy)	Issuer’s stored-value ledger; merchant payout flows through issuer ↔ merchant contracted settlement schedule via Zengin

The 4-party vs 3-party card distinction matters because in a 3-party scheme there is no interchange fee — the brand earns the full merchant fee net of acquirer cost since the brand IS the issuer-acquirer.

License under Japan law

The license question is downstream of the balance layer, not the UX. A page reader should not call PayPay “a credit card competitor” without first identifying which sub-balance the transaction touched.

Class	License stack	Key obligations
Card	Installment Sales Act registration (包括信用購入あっせん業者 / 包括信用購入あっせん業 etc.); separate registration for issuer vs merchant-contracting party (アクワイアラ) vs PSP under METI 115 list	Cardholder credit screening, security guideline (J-CSC), PCI DSS for merchants / PSPs, EMV 3-DS for EC, chargeback rules from brand
Code	Funds Transfer Service registration (Type I / II / III) for transfer-capable balance; Prepaid Payment Instrument issuer registration for stored-value sub-balance; multiple licenses often held in parallel by the same operator	User-fund safeguarding (deposit / trust / guarantee), AML / CFT, unauthorized-transaction handling under Payment Services Act
A2A	Banking Act for the account itself; JEPPO infrastructure rules; electronic payment agency (電子決済等代行業) registration where a third-party initiates payment instructions on bank API	Authentication / device-binding under bank API contract, account-information access rules, unauthorized debit compensation (預金者保護法 framework)
Prepaid	Prepaid Payment Instrument issuer notification (自家型) or registration (第三者型) under Payment Services Act; FSA 803-row third-party prepaid registry	50% of unused-balance amount required to be safeguarded with deposit / trust / guarantee; refund process at discontinuation; expiry / unused-balance accounting

Acquirer model (single-acquirer vs multi-acquirer)

Class	Acquirer structure
Card	Multi-acquirer. A merchant can pick from multiple acquirers per brand (SMBC Card, MUFG NICOS, JCB, AEON Financial Service, Rakuten Card Merchant Service, GMO-PG as PF acquirer, etc.); merchant fee is negotiated per acquirer, per brand, sometimes per MCC. For Amex / Diners (3-party) the brand is effectively the sole acquirer.
Code	Single-acquirer per wallet. PayPay merchants contract with PayPay (or via a gateway like Netstars that wholesales the connection); d払い merchants contract with NTT docomo. Multi-wallet acceptance is achieved by signing multiple wallet contracts OR by signing one QR-gateway aggregator.
A2A	Single-scheme acquirer. Bank Pay merchants contract with JEPPO; J-Debit merchants contract with JEPPO. No alternative acquirer exists for the same scheme.
Prepaid e-money	Single-acquirer per scheme. Suica acceptance is contracted via JR East (and PASMO group reciprocity); WAON via AEON; nanaco via Seven Card Service; Edy via Rakuten Edy. Cross-acceptance exists between Suica / PASMO via the inter-railway 10 IC mutual-use scheme.

The single-acquirer pattern in non-card classes is one reason METI and JFTC view code and prepaid merchant fees as harder to discipline through competition than card merchant fees.

Merchant fee range (MDR + per-transaction)

These are public-reported ranges. Actual merchant fees vary by MCC, ticket size, ECR vs MPM QR, on-us vs off-us, and negotiation power.

Class	Typical merchant fee (MDR)	Per-transaction fixed
Card	JFTC 2022: simple-average ~2.70%, weighted-average ~1.66%; Payments Japan 2022 roadmap: Category I avg 2.63%, Category II avg 2.89%	Usually none in classic MDR; PSP-layer may add per-tx fee
Code (PayPay et al.)	Small-merchant MPM QR has historically been 0% (PayPay zero-fee promo 2018-2021) → now ~1.6% to 1.98% MPM and ~1.98% to 2.95% CPM for general merchants; large-chain negotiated rates lower	Some wallets add fixed yen per-tx for sub-300-yen tickets
A2A (Bank Pay)	Public published rate range similar to or below code payment; merchant bears bank-side processing fee under JEPPO schedule	Account-debit processing fee per transaction
Prepaid e-money	Typically 2-3% range; transit-zone Suica merchant fee historically lower in railway-owned retail; WAON / nanaco fees set by issuer	Per-tap processing fee sometimes embedded

Issuer fee / interchange — who earns what

Class	Interchange or issuer-side share	Where it sits
Card (4-party)	Visa / Mastercard / JCB Japan standard interchange rates published since 2023 (Payments Japan roadmap 2023); Payments Japan 2022 roadmap recorded issuer fee = 1.56% in both Category I and Category II	Acquirer pays issuer interchange out of merchant fee; brand also takes scheme fee
Card (3-party Amex / Diners)	No interchange — brand is issuer and acquirer	Brand keeps full merchant-fee margin after PSP / processor cost
Code	No formal interchange in the card sense; instead funding-source fee to the upstream layer: card-funded code payment passes card MDR through, bank-debit funded passes bank fee, prepaid-balance funded keeps margin internal	Wallet operator keeps balance-funded margin; card-funded leaks margin to the card class
A2A	Bank-side processing fee paid to debit-account bank; JEPPO scheme fee	Bank keeps account-debit revenue; merchant relationship owned by JEPPO
Prepaid	No external interchange; issuer keeps merchant fee minus processing cost; negative-float economics if value is loaded but unspent	Issuer earns float yield + breakage on unredeemed balance

A 4-party card transaction at a typical ~2.5% MDR will pay roughly 1.5-1.6% interchange to the issuer (Japan number from Payments Japan), ~0.3-0.5% brand fee, with remainder split between acquirer and PSP. See interchange and merchant fee stack for the source pack.

Settlement cycle

Class	Merchant settlement	Consumer billing
Card	T+M (monthly batch) traditional; major PSPs offer T+5 to next-day settlement at premium	Cardholder billed mid-month following purchase month (typical 1-2 month float for issuer credit)
Code	T+1 to T+M depending on wallet plan; PayPay Bank-linked settlement can be next-day; non-bank settlement weekly/monthly	Funding event (charge from bank / card / cash) happens before or at transaction depending on funding rail
A2A	T+0 to T+1 (instant debit at consumer side, batch credit at merchant side via twice-daily Zengin / Cotra settlement)	Instant — bank account debited at transaction
Prepaid	T+1 to T+M depending on issuer’s merchant contract	Value pre-loaded; consumer is “billed” at load event

The card class is the only one where the consumer enjoys structural credit float — every other class debits at or near transaction time, which is a major reason credit cards still hold the majority of cashless value even though code payments dominate transaction count.

Chargeback handling

Class	Chargeback / dispute path	Consumer protection lever
Card	Brand-rules chargeback (Visa Dispute, Mastercard Chargeback, JCB Dispute, Amex Dispute); merchant evidence flow through acquirer → brand → issuer; reason codes standardized	Strong — Installment Sales Act 抗弁の接続 for installment, plus brand chargeback rules
Code	Wallet-operator dispute desk; no standardized inter-wallet chargeback framework; refund typically negotiated through merchant or wallet customer support	Weaker — depends on wallet T&C; no statutory chargeback right
A2A	Bank unauthorized-debit framework (預金者保護法 for cash card; bank API rules for Bank Pay); reversal flows through bank dispute process	Strong for unauthorized; weak for merchant disputes (consumer must pursue merchant directly)
Prepaid	Issuer refund policy under Payment Services Act termination process; no merchant-dispute chargeback	Weak — refund only on instrument discontinuation, not for individual disputed purchases

Chargeback strength is a major reason card payment is still the default in high-ticket EC, travel, and B2C subscription — the consumer has a path back if the merchant fails to deliver.

Acceptance footprint

Class	Domestic offline	Domestic online	Cross-border
Card	Universal (POS, EMV contact / contactless)	Universal	Yes — international brand network
Code	High (convenience stores, restaurants, drugstores, 商店街); MPM QR cheap to deploy	Growing but less universal than card for high-ticket EC	Limited — bilateral with Alipay+, WeChat Pay routes through gateway PSPs
A2A (Bank Pay / J-Debit)	Limited acceptance; concentrated in supermarkets, drugstores, some chains	Limited	None — domestic-only bank rail
Prepaid e-money	Very high in transit (Suica / PASMO), mall (WAON), convenience store (nanaco); cap at low-ticket due to charge ceiling	Limited (Suica internet, Edy on EC)	None — closed domestic scheme

The cross-border lane is where card class retains an essentially unique position — inbound tourist payment and outbound consumer payment both default to international brand networks despite all the domestic-only competition.

Authentication / fraud control stack

Class	Primary auth at transaction	Secondary controls
Card	EMV contact / contactless + PIN at POS; EMV 3-DS for EC (mandatory from 2025-03 for EC card payments under METI / J-CSC guideline 6.0); tokenization for in-app	PCI DSS for merchants / PSPs, non-retention rule, J-CSC vulnerability scanning, brand fraud-monitoring
Code	Device-binding to wallet app + biometric (Face ID / Touch ID / Android equivalent) + 4-digit PIN; OTP at high-value events	Wallet AML monitoring, KYC at registration / upgrade tier, transaction-velocity limits, device-change re-authentication
A2A	Bank app login + biometric + bank-side device-binding; bank API access controlled by electronic payment agency contract	Bank fraud-monitoring, daily debit cap, unauthorized-debit reversal (預金者保護法)
Prepaid	None at tap for low-value (Suica / PASMO unattended cap typically JPY 20,000); PIN for higher-value or refill	Issuer-side fraud monitoring, ID-binding for mobile-app variants (Mobile Suica, WAON app)

The EMV 3-DS requirement for EC is the single biggest 2025 control change — see Japan card security and authentication controls for the full guideline 6.0 timeline.

Loyalty / point economics

This dimension is uniquely complex in Japan because point programs operate as a parallel currency layer that overlaps but does not align with the payment-scheme layer.

Class	Who funds the points	Cross-scheme exchangeability
Card	Issuer-funded (Rakuten Card → Rakuten Point, SMBC Card → V Point, JCB Card → Oki Doki Point, AEON Card → WAON POINT)	High through 共通ポイント (V Point, Rakuten Point, d Point, PayPay Point, Ponta) — see Japan points landscape
Code	Platform-funded (PayPay Point from PayPay budget, d Point from NTT docomo, au PAY Point from KDDI, 楽天ポイント from Rakuten) — campaign subsidies historically aggressive	V Point ↔ T Point (integrated 2024); PayPay Point and Rakuten Point are closed to in-group; d Point and au PAY Point have selective cross-merchant acceptance
A2A	None or minimal (Bank Pay / J-Debit don’t run a point currency)	N/A
Prepaid	Issuer-funded (WAON POINT, nanaco point, Suica reward via JRE POINT, Edy reward via Edy program)	Limited — typically convertible within owner group

The point layer is not free margin — it is a deliberate budget line. PayPay’s prolonged subsidy phase (2018-2022) and Rakuten’s flywheel both rely on point economics that may not be sustainable without payment-scheme-level revenue, which is why the code-payment competitive map tracks campaign-cost ratios.

Cross-scheme exchangeability and interoperability

Lane	Mechanism	Reality
Card brand cross-acceptance	EMV + brand rules	High — any brand-acquired terminal accepts that brand globally
Code-payment cross-wallet	QR-gateway aggregation (Netstars JPQR, SBPS)	Partial — merchant can accept multiple wallets via one gateway, but each wallet still routes through its own scheme
Prepaid IC mutual-use	10 IC card mutual-use agreement (Suica, PASMO, Kitaca, manaca, TOICA, SUGOCA, hayakaken, nimoca, ICOCA, PiTaPa)	High within transit zone; merchant-side acceptance varies
A2A interop	Cotra system bridges deposit-taking institutions and funds-transfer operators	Growing — adoption depends on participating apps
Point cross-redemption	共通ポイント agreements + V Point ↔ T Point merger	Selective — not all points convert to all others

The Suica / PASMO 10 IC mutual-use scheme is the strongest interoperability story in the prepaid class but is constrained by the transit-zone footprint. The code-payment class has nothing comparable — QR gateways aggregate acceptance for the merchant but do not create a true mutual-use scheme between wallets.

BoJ-NET / Zengin / Cotra dependency

Class	Settlement infrastructure dependency
Card	Net-position settlement ultimately moves through bank accounts → Zengin domestic transfer → BOJ-NET for inter-bank final settlement
Code	Wallet operator settles merchant payout via Zengin transfer; user-funding charge from bank account uses Zengin or bank API
A2A	Direct dependency — Bank Pay / J-Debit are JEPPO services; Cotra is operated by Zengin-Net
Prepaid	Merchant payout via Zengin transfer; load events via Zengin or bank API

Every Japan payment scheme is ultimately a Zengin / BOJ-NET dependent system because every scheme eventually needs to move yen between commercial bank accounts. See Japan payment clearing and settlement infrastructure for the full clearing map.

Stablecoin / EPI overlap

A potential fifth scheme class is emerging around tokenized money. It is not yet at scale but the legal route is now defined.

Tokenized money type	Sits next to	Scheme analogy
JPYC (electronic payment instrument under EPI route)	Prepaid + funds-transfer hybrid	Closer to prepaid economics but with on-chain transferability
Progmat coin (trust-type stablecoin)	Funds-transfer / banking-trust	Bank-issued deposit-token analog
USDC via SBI VC Trade (electronic payment instrument exchange service / ECISB route)	Foreign-issued EPI, traded via VASP-adjacent exchange	Cross-border-capable scheme analog
Deposit token (DCJPY)	Banking	Tokenized bank deposit

See Japan EPI three types overview for the regulatory classification. For payment-scheme purposes, these add a sixth balance layer that does not yet have a defined merchant-acceptance footprint or chargeback regime, so they are excluded from the four-class matrix above.

Recent regulatory pressure

Date	Source	What changed
2022-04-08	JFTC	Report on credit-card merchant fees: documented size-based fee dispersion, called for greater interchange transparency
2023-06-01	METI + JFTC	JCB disclosed allocation rate of card merchant fee between issuer and acquirer (first major brand to do so in Japan)
2023	Payments Japan roadmap	Visa, Mastercard, UnionPay published Japan credit-card standard interchange rates
2024-2025	METI 6.0 / 6.1 guideline	EMV 3-DS mandatory for EC card payments; non-retention rules tightened; vulnerability-scan obligations expanded for EC merchants
2025-2026	METI cashless ratio release	2025 cashless ratio 58.0% / JPY 162.7 trillion; pressure for fee disclosure extends from card class toward code and prepaid classes
Ongoing	JFTC	Periodic investigations into merchant-fee opacity, single-acquirer pricing power in code and prepaid classes

The disclosure pressure is currently concentrated on card class (which is also where the public-data depth is greatest) but is extending toward code-payment fee disclosure as code-payment share of cashless value continues to grow.

Cross-section: micro-merchant access (商店街 economics)

The four classes look dramatically different at the sub-3-person small-merchant end of the market — a 個人商店 in a 商店街.

Class	Small-merchant onboarding	Hardware cost	All-in cost for a JPY 500 transaction
Card	Acquirer / PSP underwriting; KYC; minimum monthly fee in some plans; EMV-capable terminal required	JPY 0 (PSP-provided tablet reader) to JPY 50,000+ (full POS)	~JPY 12.50 to JPY 14.75 MDR + terminal amortization + monthly fee
Code (MPM QR)	Wallet app account + bank account; minimal docs; printed QR sticker	JPY 0 (printed QR)	~JPY 8 to JPY 14.75 MDR; sometimes 0 in promo periods
A2A (Bank Pay)	Bank account + JEPPO merchant agreement	JPY 0 (printed QR for MPM)	Bank-side processing fee + merchant fee
Prepaid (Suica / WAON / etc.)	Issuer underwriting; FeliCa reader required	JPY 30,000+ FeliCa reader	~JPY 10 to JPY 15 MDR + reader hardware

The MPM QR economics of the code class is the only scheme that gives a 商店街 micro-merchant near-zero onboarding cost — this is why code payment penetrated the small-merchant segment faster than any prior cashless wave. The card class is structurally disadvantaged at this end because of hardware cost and underwriting friction; the prepaid e-money class requires a FeliCa reader that most micro-merchants cannot justify; A2A acceptance among micro-merchants is still narrow.This micro-merchant cost gap is also where the JFTC merchant-fee investigations are most politically charged — METI’s cashless policy explicitly recognizes that small-merchant fee burden is the bottleneck for moving Japan’s cashless ratio from the 2025 baseline of 58.0% toward the 2030 target of 65%.

Sources

Payments Japan Association: publications index and 2022 / 2023 cashless roadmap.
Payments Japan Association: code-payment trend survey (2026-03-30 publication page).
METI: cashless payment policy portal and 2025 cashless ratio release (58.0% / JPY 162.7 trillion).
METI / JFTC: 2023-06-01 release on JCB merchant-fee allocation-rate disclosure.
METI: Installment Sales Act registration lists; credit-purchase / post-pay FAQ.
BOJ: payment and settlement system portal and outline.
JFTC: 2022 credit-card merchant-fee report and release.
FSA: funds-transfer service provider registry; third-party prepaid issuer registry; prepaid policy page.
Zengin-Net: Cotra system linkage explanation.
Cotra: official service page.
JEPPO: Bank Pay official page.
JCB: brand / payment-network public materials.