Japan Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in japan, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Financial Technology
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Overview 

Tokyo ranks 22nd among global financial centers according to the March 2025 Global Financial Centre Index, trailing major hubs like New York, London, and Singapore, despite Japan being the world’s fourth-largest economy. This gap underscores significant opportunities for growth, as Tokyo’s ranking factors include human capital, business environment, finance, infrastructure, and reputation. Both Japan’s central government and the Tokyo Metropolitan Government are actively working to revitalize Tokyo’s financial standing, with the Japan Financial Services Agency and local authorities dedicating teams to attract foreign financial services firms. This presents a valuable gateway for U.S. FinTech companies seeking to enter or expand in Japan. 

 

Since 2016, the Bank of Japan (BOJ) has championed FinTech growth and digital currency innovation, conducting central bank digital currency (CBDC) proof-of-concept and pilot programs with private sector involvement, signaling a strong push toward payment digitalization. Major Japanese banks, including Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho, have formed active partnerships with FinTech firms, opening further avenues in payments, settlements, and blockchain technology. 

 

Globally, FinTech investment totaled $95.6 billion in 2024, with $5.5 billion in Asia-Pacific alone, according to KPMG’s Pulse of FinTech H2’24 report. Payment systems remain the dominant subsector worldwide. Japan’s Fintech Association counts 140 venture members but has relatively few unicorns, largely due to limited venture capital availability, highlighting an area where U.S. companies can play a pivotal role in shaping Japan’s evolving FinTech landscape.
 

Leading Sub-sectors 

The following are Japan’s active and growing FinTech sub-sectors: 

Digital Payments 

Until recently, Japan lagged behind other countries in adopting cashless systems. However, driven by the Government of Japan’s (GOJ’s) digitalization efforts during the COVID-19 pandemic, more residents have become accustomed to cashless payments. These include mobile payments using QR codes or barcodes, such as d-Barai, au Pay, Rakuten Pay, PayPay, and Merupay. According to the Ministry of Economy, Trade, and Industry (METI), the share of cashless payments rose to 42.8% in 2024 from 26.8% in 2019, though credit cards still account for the majority of such transactions in Japan.

Buy Now, Pay Later (“BNPL”) 

Although Japan has only a few BNPL payment providers, the number of eCommerce stores that accept BNPL payment is increasing.  This payment service is popular among younger Japanese consumers that do not or cannot obtain credit cards.   

Digital Banking  

Online banking usage is increasing in Japan, driven by the COVID-19 pandemic, the decline of physical bank branches, and the growth of online-only banks like Rakuten Bank. The rise of embedded finance has also contributed to the expansion of digital banking brands. Embedded finance integrates financial services into the apps and websites of non-financial companies. For example, JR East launched JRE Bank with Rakuten Bank, while Takashimaya, a department store, and Yamada Denki, an electronics retailer, partnered with SBI Sumishin Net Bank to create Takashimaya Neo Bank and Yamada Neo Bank. These neo-banks offer services such as deposits and mortgages directly through non-financial platforms.

Digital Lending

Digital lending provides credit through online platforms, eliminating the need for paperwork, in-person visits, and traditional credit checks. Using technologies such as AI and big data, it enables faster, more convenient borrowing. In Japan, the digital lending market is expanding for both personal and business loans.

Insurtech 

Insurtech leverages technologies like AI to streamline insurance processes and enable more competitive pricing. It enhances customer service by simplifying applications, automating interactions, and improving premium simulations. Accelerated by the COVID-19 pandemic, insurers are rapidly digitizing contract procedures and payment requests, while strengthening virtual sales channels.

Regtech

Regtech (regulatory technology) leverages big data, artificial intelligence, and blockchain to manage regulatory processes in the financial industry, helping to reduce risk, enhance compliance, and prevent money laundering and fraud. Japan lags in this area, presenting business opportunities for American companies.
 

Opportunities

Both Japan’s central government and the Tokyo Metropolitan Government are working to revitalize Tokyo’s role as an international financial hub. Tokyo has a dedicated team focused on attracting foreign financial services companies. Similarly, Osaka Prefecture and the City of Osaka are promoting Osaka—Japan’s second-largest city—as a global financial center. In December 2021, they established the Osaka Global Finance One-Stop Support Center to assist foreign financial firms and investors entering the market. U.S. FinTech companies may find valuable opportunities in Osaka for entering or expanding in Japan.

Fukuoka Prefecture, in southern Japan, is also seeking to attract international financial and FinTech firms through collaboration among industry, academia, and government. In 2021, it signed a partnership agreement with the Fintech Association of Japan and has launched initiatives such as business matching events and subsidies for companies establishing a presence in the region.

These initiatives create promising entry points for U.S. FinTech companies looking to tap into Japan’s growing financial markets. By leveraging local support and partnerships, U.S. firms can accelerate their expansion and innovation in Japan’s evolving FinTech ecosystem.

Resources

Relevant Agencies of the Japanese government:

Tokyo Government Agencies 

Osaka Government Agencies 

FinTech Organizations 

Upcoming FinTech Events 

Commercial Service Japan  

For more information about Japan’s FinTech sector, please contact the U.S. Commercial Service at Office.Tokyo@trade.gov or Ms. Tamami Honda at Tamami.Honda@trade.gov.