The humble Japanese convenience store can be an unexpected highlight for new visitors to the country. The huge range of only-in-Japan snacks and goodies is enough to excite any tourist, but what is perhaps most remarkable about “kombinis” is not the products, but the number of payment options.

Japan is no stranger to innovative payment solutions – electronic money cards have dominated the wallets of consumers since IC cards were first introduced by railway companies for commuters in 2001, and Japanese cell phones have had contactless payment chips since long before even the first iPhone. Pop into any kombini and you will be confronted with a tough choice: Should I use cash, credit card, loyalty points or any of 14 different types of electronic money? Will it be with an IC card, a cell phone, a keyring chip or one of an ever-growing number of e-wallet apps?

While more choice is generally considered a good thing for consumers, this situation presents a problem – even beyond that of having to weigh up the benefits of dozens of different payment options every time you buy a sandwich. While large convenience store chains may have the scale to be able to provide the expensive contactless terminals, credit card readers and code scanners to meet such demands, it’s Japan’s “mom and pop” stores that are in danger of being left behind as their customer base comes to expect this level of flexibility.

“Almost any chain of convenience store will accept your e-money card,” says Shigenobu Kobayashi of Rakuten’s Card and Payments Company. “But you won’t have much luck trying the same thing at grandpa’s candy shop.”

Rakuten Pay's new devices will also accept Japan's 14 major e-money brands.

Rakuten Pay’s new devices will also accept Japan’s 14 major e-money brands.

Kobayashi heads Rakuten Pay, a payments service designed to help businesses of any scale provide affordable and flexible payment options – and that this summer will be launching a new set of devices that accept all 14 major Japanese e-money brands.

“All of these modern payment methods have traditionally been out of reach for mom and pop stores,” he explains. “The service fees are often too high, the payment cycle too slow, the payment terminals too expensive.”

Soon after launching in 2012, Rakuten Pay exploded in popularity in the retail world, earning praise for its low transaction fee, next-day payment processing and affordable counter-top terminal. Kobayashi says the business was a natural extension of both Rakuten’s credit card business and the e-commerce marketplace – if they were going to promote consumer usage of credit cards in Japan, it made sense to help businesses get set up to receive them.

“Rakuten Card has been growing like crazy – it’s on track to become Japan’s biggest credit card by transaction volume,” commented Kobayashi. “Much of that has been thanks to the explosive growth in the number of users, but increasing the number of businesses that can accept credit cards is also an important piece of the puzzle – and that’s where Rakuten Pay comes in.”

Rakuten Pay is making modern payment methods possible for Japan's "mom and pop" stores, says Shigenobu Kobayashi of Rakuten's Card and Payments Company.

Rakuten Pay is making modern payment methods possible for Japan’s “mom and pop” stores, says Shigenobu Kobayashi of Rakuten’s Card and Payments Company.

Another driving reason behind the move was something that lies close to the core of Rakuten philosophy: “Rakuten has always been about empowerment, so we really wanted to lead the way in empowering Japan’s small to medium sized businesses by bringing them up to speed on payment methods. This was just like how Rakuten Ichiba brought so many businesses into the digital age with e-commerce 20 years ago.”

While similar services have made attempts to infiltrate the Japanese market, none have been quite as successful as Rakuten Pay. PayPal ceased operations of its PayPal Here service in Japan after less than three years on the market, while industry observers say that Square has yet to catch on. Kobayashi believes that the automated “one size fits all” approach doesn’t work for Japanese businesses.

“It might work for tech-savvy Silicon Valley businesses, but Japan is a very different market,” stresses Kobayashi. “These mom and pop stores, many of them started doing business long before the internet. Some of them have never even touched a smartphone before. So while our competitors were trying to cut costs with automated support centers, we were on the phone teaching our clients how to tap and swipe.

“The people we work with often aren’t looking for some fancy piece of technology,” he continues. “They just want something simple and affordable that won’t break down on them. So that’s what we gave them.”

In addition to a competitive business strategy, Rakuten Pay now has an extensive business network to spread the word about new services, such as its recently launched in-app payment service. “That’s another thing that only Rakuten can do,” he says. “Anyone can pump out a TV commercial, but we have real businesses talking to real people all over Japan about our services.”

In the words of Rakuten CEO Hiroshi “Mickey” Mikitani, people will always be attracted to services with a human touch, no matter how far technology advances. In an industry that tends to venerate automation and software solutions, Rakuten Pay’s success is a reminder that the human element should never be forgotten.