Rakuten Card hits 20 trillion yen milestone as Japan embraces cashless economy

One of Japan’s most popular credit cards hit an astonishing new milestone: Over the 12 months to July 2023, Rakuten Card users spent 20 trillion yen – more than a 20% jump over the previous period.

Rakuten Card’s incredible growth trajectory can be attributed in part to a broader trend in Japan’s cashless economy. Including e-money and mobile code payments, cashless transactions expanded to 36% in 2022 to reach 111 trillion yen. The vast majority of this spending – 93.8 trillion yen – came from the credit card sector, which grew 15.8%.

Why is Japan embracing cashless like never before? And why is Rakuten Card’s growth outpacing the rest of the field? We spoke to Rakuten’s Card Strategy Planning Department Manager Yoshihiro Ogawa for some insights.

Japan’s cashless journey has only just begun

Ogawa is in charge of marketing and strategy for growing Rakuten Card’s overall shopping GTV (gross transaction value), which is an important indicator of the service’s performance. He believes there is still plenty of room for growth for Japan’s cashless economy.

“In 2022, Japan’s cashless payment rate was 36%,” he explains. “METI (Japan’s Ministry of Economy, Trade and Industry) is aiming to bring this up to around 40% by 2025, towards an eventual goal of reaching a global standard of 80% in the future. So, we believe there is still plenty of room for growth. “

Ogawa sees a number of factors contributing to this trend. In 2019, the Japanese government launched a point loyalty scheme encouraging consumers to pay with cashless methods. The COVID-19 pandemic further spurred the adoption of contactless payments, while the recent rebound in Japan’s tourism and leisure industries is again seeing increased spending.

“There was some tailwind provided by the government’s cashless promotion,” he says. “The pandemic also contributed to the adoption and penetration of contactless payments. Recently, the adoption of systems like QR code payments and tap-to-pay is on the rise, so it certainly looks as though the cashless trend will continue into the future.”

The heart of Rakuten fintech

Rakuten operates a number of payment and fintech services in addition to Rakuten Card. Rakuten Pay allows members to pay at physical stores with codes on their phones, while Rakuten Edy has provided e-money payments for over 20 years.

Other fintech services such as Rakuten Securities and Rakuten Bank have also proved very popular among members in Japan, and Rakuten’s entire ecosystem is connected through Japan’s favorite loyalty program, Rakuten Points.

“Recently, we’ve been very focused on bolstering our collaborations with other Rakuten Group companies, and fostering our membership base by showing customers the benefits of the Rakuten Ecosystem.”

Members are evidently catching on. Rakuten Card’s shopping GTV outpaced Japan’s overall credit card sector to grow over 20% year-on-year through a combination of both increased spending within the Rakuten Ecosystem and in the wider economy.

Membership also continues to rise. As of April 2023, Rakuten Card had issued more than 28 million cards in Japan. Over two million of these came from customers issuing their second card.

Rakuten’s winning formula: The power of points

“I think that customers are attracted by the very simple product premise that we’ve offered since the beginning: one Rakuten Point for every 100 yen spent,” Ogawa conjectures. “I also believe that our point strategy is bearing fruit. We’re leveraging the strengths of the Rakuten Ecosystem to aid steady GTV and membership growth.”

Ogawa is confident that Rakuten Card will continue serving as a core pillar of the Rakuten Ecosystem.

“The Rakuten Group offers a full lineup of cashless services – credit card, e-money and QR code payments,” he says. “Leveraging our strengths as one of Japan’s biggest credit card companies with such a strong membership base, we aim to further strengthen integration with all of the Rakuten Group’s payment services and provide even more convenient services to support the lifestyles of each and every one of our customers.”