Localization of Japan Stream Payments: Implementation Guide from QR Codes to Post-Payment

For overseas manufacturers to maximize conversions in Japan's e-commerce market, the key benchmarks are payment method diversity and culturally rich localization.

1. QR Code Payments: PayPay, Rakuten Pay, and au PAY

Cashless payments have rapidly expanded in Japan, reaching around 39% of all payments in 2024.Among these, QR code payments account for roughly 10% of total transactions, according to data from Japan’s Ministry of Internal Affairs and Communications and the Ministry of Economy, Trade and Industry (METI).

PayPay

Japan’s largest QR payment platform, PayPay, had over 65 million registered users and more than 10 million merchant locations as of August 2024. It is widely used by small retailers and major e-commerce platforms alike. Case studies report that introducing PayPay as an additional payment option has reduced cart abandonment rates and increased mobile payment conversion ratios.

Rakuten Pay

Rakuten Pay leverages the ecosystem of Rakuten Market and Rakuten Card, promoting cross-platform usage.Its integration into proprietary e-commerce sites has been shown to improve repeat purchase rates, particularly among existing Rakuten members.

au PAY

Backed by KDDI’s extensive mobile subscriber base, au PAY is known for its strong loyalty program integration and point-based rewards. It has gained traction among electronics and digital product e-commerce stores, appealing to middle-aged and senior users through its seamless linkage with au mobile billing.

Implementation Steps:

1. Sign a contract with a payment service provider (PSP) – e.g., GMO Payment Gateway, SB Payment Service, KOMOJU.

2. Integrate via API/SDK – Add PayPay, Rakuten Pay, and au PAY buttons at checkout.

3. Conduct testing – Verify redirects, success/failure handling, and sales reflection.

4. Optimize the UI – Dynamically recommend “PayPay” for new visitors and “Rakuten Pay” for returning customers.

2. Postpaid (BNPL) Options: Centered on Paidy

“Buy Now, Pay Later” (BNPL) services are rapidly gaining popularity in Japan for providing a sense of payment security.The Japanese BNPL market is projected to reach approximately USD 20 billion (≈ JPY 3 trillion) by 2025 (GlobeNewswire, February 2025), driven primarily by users in their 20s and 30s.

Paidy

Paidy is Japan’s leading BNPL service, allowing purchases without a credit card—only an email address and phone number are required. It also offers Shopify, Magento, and WooCommerce plugins, enabling seamless integration for global e-commerce operators.

Implementation Steps:

1. Apply via the official Paidy website (review typically completed within 3 business days).

2. Integrate using an API or available plugins.

3. Optimize UI messaging – emphasize “no fees” and “pay next month” to increase trust.

4. Manage billing through Paidy’s dashboard – send automated reminders and payment alerts.

3. Mobile Carrier Payments: docomo, au, and SoftBank

Mobile carrier billing remains popular in Japan due to its simplicity and security, especially among users without credit cards. It allows payments to be charged directly to a mobile phone bill, appealing to both younger and older demographics.

Implementation Steps:

1. Contract directly with a mobile network operator (MNO) or through a PSP.

2. Implement API – Enable one-step authentication via mobile number.

3. Optimize UI – Clearly display “No card required” and “Charged with your mobile bill.”

4. Monitor results – Track CVR, cancellation, and complaint rates monthly to fine-tune performance within 1–2 months.

Some e-commerce merchants have reported a rise in average order value (AOV) following carrier payment implementation.

4. Cash on Delivery (COD) and Bank Transfers

Despite the rise of cashless options, cash payments retain strong trust in Japan, particularly for high-value items.Many customers still choose “Cash on Delivery (COD)” as a reassurance of transaction security.Bank transfers remain standard in B2B and business-related purchases, where prompt deposit confirmation and polite communication directly enhance conversion rates.

Example:One e-commerce business reported a 5-point reduction in cancellation rate after revising its bank transfer confirmation email to include the line:“Your order will be shipped today upon payment confirmation.”

5. Optimizing Payment UX and Continuous PDCA

Simply offering multiple payment options is not enough—UX optimization is key.Successful companies operate on a continuous PDCA cycle focused on user experience and data-driven refinement.

• KPI Setting: Monitor CVR, drop-off rate, chargeback ratio, and AOV by payment type.

• Heatmap Analysis: Improve visibility and click-through on payment selection screens.

• A/B Testing: Test button placement, text, and color schemes for better performance.

• Customer Feedback: Conduct regular surveys on payment satisfaction and trust.

Conclusion

Japan’s e-commerce payment landscape continues to evolve around three pillars: flexibility, trust, and diversity.For overseas brands, combining QR code payments, BNPL, carrier billing, bank transfers, and COD—while continuously refining UI/UX—is the key to true localization success.

By following the steps outlined here, international e-commerce operators can transform their payment experience from a “cross-border model” to a “culturally resonant, Japan-optimized experience.”

Source: “D2C E-Commerce in Japan: The Complete Guide – ULPA (2025)”https://www.ulpa.jp/post/d2c-e-commerce-in-japan-the-complete-guide