Boston, MA
July 2004

Credit Cards in Japan


In 2002, Japanese consumers purchased JPY 24.7 trillion (USD 198 Billion) worth of goods and services resulting in 2,339 million credit card transactions.  There were nearly 245 million credit cards in circulation in the same year; making Japan one of the world’s largest credit card markets.

The credit card industry has gone through a busy M&A period recently, UFJ Bank acquired Nippon Shinpan and the merged credit card business created Japan’s second largest issuer with over 23 million cardholders.  Meanwhile, Mizuho Holdings took management control of Orient Corp.

In April of 2004, Japan lifted the ban on banks, which prohibited them from directly offering credit cards.  While this gives Japanese banks the opportunity to offer a more complete product mix and target the consumer segment more effectively (where they have been less penetrated historically), it also requires banks to tackle the issue of bad loans before starting to lend more aggressively through credit products.

Evren Bayri, Director of Mercator Advisory Group’s Credit Advisory Service comments, “In addition to the mergers and acquisitions, there is an increasing number of partnerships happening in the industry.  These partnerships aim to improve operational effectiveness as well create access to different market segments.”

This report contains 20 pages and 14 exhibits.

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