News Japanese credit firms consider adding fees for foreign-issued Visa, Mastercard transactions

thomas · 5 Sep 2025

With the continued surge in inbound tourism, Japanese credit card firms are facing mounting costs from fees paid to international brands such as Visa and Mastercard, leading some to consider imposing surcharges on cards issued overseas. A Nikkei survey in July found that six of the eight leading Japanese credit card companies reported greater losses on foreign card transactions compared with the previous year.

Many domestic card issuers also serve as merchant service providers, handling payment terminals and charging merchants around 1.9% per transaction. However, when the payment involves a foreign-issued card, they must pay about 1.8% to the issuing bank and 0.8% to the card brand. This leaves them with a negative margin of around 0.7%. As a result, the more foreign visitors use their cards in shops and restaurants, the deeper the losses for Japanese card companies.

Developer Mori Trust has estimated foreign visitors to Japan will spend around 10 trillion yen ($67 billion) this year. If credit cards account for about half this total, that could amount to an overall loss of around 35 billion yen for Japanese card companies, by some estimates. Three companies surveyed said they intend to impose new fees on international travelers, rather than the merchants in their networks. When asked how high such fees should run, six said that the 1%-to-3% range would be appropriate. The companies envision this being paid on top of the 1.9% charge already imposed on merchants. There are hurdles to actually taking such a step, including the cost of upgrading payment terminals and networks to handle additional fees. Two companies cited such development costs as the biggest challenge, while three others see gaining the understanding of foreign visitors as a larger obstacle. Presenting another barrier are the contracts between card companies and international card brands, which mostly do not allow for charges beyond the normal price of a product. This is generally interpreted to mean that it would be difficult for card issuers or the merchants in their networks to impose fees at their own discretion.

Paywall alert:

Japan credit companies weigh fees for Visa, Mastercard issued overseas

Rise in tourism means more money lost to foreign cards

asia.nikkei.com

https://www.meti.go.jp/english/press/2022/1130_003.html

Petaris · 5 Sep 2025

They could always go back to only accepting cash. I'm sure that wouldn't hurt sales
This really seems like a "cost of doing business" matter. I'm sure the card companies don't want to loose their yearly "records profits" announcement but at some point they should consider that adding additional fees is more likely to hurt them than it will help them.

I also think, if their cost is 2.6%, then their fee shouldn't be any more than that. Why do they need to make a profit on the fees as well?

News Japanese credit firms consider adding fees for foreign-issued Visa, Mastercard transactions

thomas

Unswerving cyclist

Japan credit companies weigh fees for Visa, Mastercard issued overseas

Petaris

Sailing away...

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