How Payments Work in Japan: PayPay, Credit Cards & Apple Pay

The Payment Landscape in Japan

Japan was long known as a cash-only country, but cashless payments have been accelerating. According to METI (Ministry of Economy, Trade and Industry), the cashless payment ratio reached 39.3% in 2023 and continues to climb year over year.

That said, the on-the-ground reality is messy. You’ll encounter shops that accept credit cards but not QR payments, shops that accept PayPay but not credit cards, and shops that are still cash-only. There is no single payment method that works everywhere.

The major payment methods in Japan are:

• Cash
• Credit cards (Visa / Mastercard / JCB)
• QR code payments (PayPay, Rakuten Pay, d-barai)
• Transit IC cards (Suica, PASMO)
• Mobile wallets (Apple Pay / Google Pay) Large chain stores and department stores almost always accept credit cards. Small independent restaurants and shops, however, may skip credit cards due to processing fees — and instead only accept PayPay (which has lower merchant fees). This is a pattern you’ll see all over Tokyo.

What Is PayPay? Can Foreigners Use It?

PayPay is Japan’s largest QR code payment service. You scan a QR code displayed at the shop (or show your own QR code) using the PayPay smartphone app. It’s accepted at a huge number of merchants — including small shops, street food vendors, and even some market stalls that don’t take cards.

Key features of PayPay:

• Massive merchant network — often the only cashless option at small shops

• Frequent cashback campaigns and point promotions

• Identity verification accepts residence cards (在留カード) in addition to driver’s licenses and My Number cards Can foreigners use PayPay? Yes — if you’re a resident. You need:

• A Japanese phone number (SMS verification required)

• Identity document (residence card works)

• A Japanese bank account or credit card for funding For short-term tourists, PayPay is essentially not an option. You won’t have a Japanese phone number or bank account. Don’t worry about it — credit cards and Suica will cover you.

Credit Cards in Japan

International credit cards (Visa, Mastercard, JCB, Amex) are widely accepted across Japan. For tourists, credit cards are the single most versatile payment method. They work reliably at:

• Hotels
• Department stores
• Large shopping malls
• Convenience stores (7-Eleven, Lawson, FamilyMart)
• Tourist attractions and museums However, small independent restaurants, izakaya, ramen shops, and market vendors may not accept cards. Some of these accept only PayPay or cash. If you see a small shop with no card terminal, ask before ordering — or just carry some cash.

One important caveat: not all stores that accept “contactless” also accept international contactless cards. The terminal might be set up for FeliCa-based payments (iD, QUICPay) rather than EMV contactless (Visa/Mastercard tap-to-pay). This catches many visitors off guard.

Apple Pay in Japan: The FeliCa Trap

Apple Pay works in Japan, but it behaves differently from most other countries. Understanding this will save you frustration at the register.

Overseas: Apple Pay means EMV contactless — you hold your phone to the terminal and your Visa/Mastercard processes via NFC. Simple.

In Japan: Apple Pay also supports FeliCa-based payments — iD, QUICPay, and Suica. These are Japan-specific contactless systems that have been around longer than EMV contactless. Many Japanese store terminals are configured for FeliCa first.

The trap: When you say “Apple Pay” at a Japanese register, the cashier often interprets this as “iD or QUICPay” and selects that mode on the terminal. If your Apple Pay only has a foreign-issued card (which doesn’t support iD/QUICPay), the transaction fails. The same card might work fine if the cashier selects “credit card contactless” instead.

What to say at the register:

• For EMV contactless: say 「クレジットのタッチで」 or 「Visaタッチで」
• For FeliCa (Japan-issued cards with iD/QUICPay): say 「iDで」 or 「QUICPayで」
• For Suica: say 「Suicaで」 Don’t say “Apple Pay” — it’s ambiguous in Japan. Be specific about the payment network.

Transit IC Cards: The Most Versatile Option

Suica, PASMO, and ICOCA are transit IC cards — originally for trains and buses, but now accepted at convenience stores, vending machines, restaurants, and countless shops. They’re arguably the most universally accepted cashless payment in Japan.

You can add a Suica to Apple Wallet on iPhone or Google Pay on Android. Once set up, your phone becomes both a train pass and a payment card. No PIN, no signature — just tap.

For tourists, this is the single most practical cashless option after credit cards. A Suica handles your train rides, convenience store purchases, vending machines, and many restaurant payments with one tap.

See our Suica guide for setup details.

What Should Foreigners Actually Carry?

For tourists: the winning combination is:

• Credit card (Visa or Mastercard) — works at most medium-to-large shops
• Suica (on your phone) — trains + small purchases everywhere
• Cash (¥10,000–¥20,000) — for cash-only spots and emergencies PayPay is not necessary for tourists. Don’t stress about it.

For residents: once you have a Japanese phone number and bank account, add PayPay to the mix. The ideal resident setup is: Credit card + PayPay + Suica + Apple Pay. This covers virtually every shop in Tokyo.

One final warning: always carry a physical credit card. Japan’s payment infrastructure is not fully unified. You’ll encounter situations where only a physical card works:

• Hotel check-in requiring a physical card for deposit
• Some department store tenants requiring card presentation for returns or high-value purchases
• Rental car agencies requiring a physical IC-chip card
• Ticket machines and self-checkout kiosks that don’t support contactless
• PIN entry on physical terminals Contactless payments handle 90% of daily life, but “phone only” will fail you at least once. Carry a physical card as backup — redundancy is peace of mind in Japan.