It’s been a long time coming but VISA Japan has finally come under scrutiny from the Japan Fair Trade Commission for breaking Japan’s anti-monopoly act, telling VISA to reform their business practices in the country. The final straw it seems was VISA Japan’s recent selective blocking of online sales of anime and manga content to ‘protect our brand’. People don’t want card companies telling them how to spend their own money, but there’s a lot more to the story. How bad was it? A recent Reddit post has an interesting list of VISA’s purportedly bad behavior (like all things Reddit, be careful):
Old-ish(?) news, but happy it’s finally seeing the light of day.
American payment processors have essentially had Japan under soft economic embargo since 2018. They physically send agents into stores to make sure things aren’t being sold for cash, they blacklist political parties, they pull plugs on anime productions, they issue “performance scores” to politicians, they cut fare processing for subway systems that they say run too many trains, they block transactions from convenience stores that stock pornography or accept Chinese credit cards, they forcibly got the government to “upgrade” payment processor standards to cripple JCB with costs, they’ve mandated contactless points of sale (Suica, etc.) integrate invasive user tracking, they’ve killed the accounts of people buying crypto, they’ve illegally issued free credit to LGBT events, they’ve enforced ESG scores, they’ve sabotaged pro-Palestine protests, they give 5-figure dollar amount gifts to foreigners and criminals, etc, etc. The son of a Visa exec actually moonlights as the head of Osaka Antifa, so I guess whatever his daddy can’t defund he tries to punch in the face.
There have been attempts to legally rein them in, but they were mostly blocked by both the UN and then-ambassador Rahm Emmanuel. Many people have moved to JCB, which is trying to fight back as best they can, but it’s still very much an active issue. If you want to support Japanese companies, please make sure you’re using JCB or directly transferring money to the company’s listed bank account!
Hopefully this Steam thing will invite real actual international action. Japan’s sort of been screaming into the void about this, it feels like.
In America’s recent presidential election VISA blocked political donations to certain groups labeling them ‘hate groups’.
It’s a long complex story with many facets, far beyond my ability to report it. On the Apple Pay Japan side there has been lots of anticompetitive behavior that I have covered over the years. Here are a few important points as I see them.
Killing off FeliCa payment networks in favor of EMV
People discuss payments as if EMV is a global standard that has been around forever. It’s important to know the Mobile FeliCa background. VISA Japan’s biggest and most important banking partner is SMBC, they issue most of VISA and Mastercard in Japan. The Mobile FeliCa Osaifu Keitai platform came together before the EMV contactless spec did. VISA/Mastercard/SMBC/JCB cooperated with Docomo to develop the FeliCa QUICPay (operated by JCB) in 2004 but Docomo quit suddenly to develop the iD payment network that launched in 2005.
- Visa shutout of Apple Pay in Japan
Flash forward a decade to October 2016 and the Apple Pay launch in Japan. By this point there was considerable friction between Docomo and SMBC that soon became a behind the scenes feud. First of all VISA Japan never wanted to support Apple Pay because it supported the FeliCa payment networks in Japan and they wanted to kill those in favor of EMV NFC. VISA refused to sign with Apple Pay for Japan thus limiting local issue Apple Pay VISA cards to the point of sale iD and QUICPay networks. No online or in-app Apple Pay for Japan issue VISA cards. This situation went on until May 2021 when VISA finally signed on for Apple Pay Japan. Just in time for the Tokyo Olympics and EMV open loop test rollouts on private rail. - Shutout of inbound VISA use for Apple Pay Suica/PASMO/ICOCA to promote EMV open loop payments
On August 5, 2022 the VISA Japan payment network merchant acquirer suddenly started blocking non-Japan issue VISA card use for Wallet in-app use with Suica, PASMO and ICOCA along with some online merchants. Users could not longer add money to those cards. The issue dragged on until iOS 17.2 update lifted the block for Apple Pay Suica, but not for PASMO or ICOCA. As of 2025-07-23, PASMO is still non-JP VISA blocked. The reasons for the block was never explained or ever acknowledged but Junya Suzuki reported his sources said, ‘undefined security risks’, which could be anything.
My own take is these VISA maneuvers had two goals: (1) promote EMV open loop systems at the expense of mobile transit card use and, (2) get more iPhone Apple Pay user data with Enhanced Fraud Prevention. Even Japanese issue card users started complaining of sudden daily Mobile Suica recharge limits of ¥2,000 to ¥3,000.
The simple gist of it all is that VISA (EMV payment network) and SMBC (stera payment platform provider) have worked to reduce NFC payment competition, i.e. kill FeliCa based payment networks in favor of EMV. A lot of people in Japanese IT media argue this as a good thing. I do not. To me strong competition is a healthier market. In addition to the EMV payment pipeline, Japan should keep the FeliCa payment pipeline. Because getting rid of it means there is no alternative to EMVCo which encompasses a ecosystem of everything from smartphone and reader NFC chips, to software, to device certification, to payment transaction pipelines and backbones (CAFIS, etc.).
The end result of VISA and SMBC maneuvers has been the Japanese mobile carriers Rakuten, SoftBank, Docomo, KDDI au pushing back with QR Code payment services like dBarai, PayPay, auPay, Rakuten Pay and so on. Locking in their own cards on the recharge backend to reduce EMV and middle man bank hanky panky as much as possible (and recoup some of the transaction fees too). Anyone who can do so has their XX Pay and reward point scheme by now. Meanwhile online merchants who don’t have means are at the mercy of VISA shutting them out if they don’t like the content.
It will take time to see what comes out of the Japan Fair Trade Commission’s action and VISA Japan’s compliance. The best Japanese IT reporter covering this beat is Junya Suzuki. He had this to say today:
I checked with the Fair Trade Commission regarding this matter. Currently, Visa basically requires authorization for all transactions processed through its brand network (VisaNet), but the condition for obtaining a preferential fee rate is that transactions must go through VisaNet, which is the issue.
For now, the two key points are: “Visa is not ‘in violation’ of antitrust laws in this case,” and “When the Fair Trade Commission began its investigation, Visa proactively submitted an improvement proposal (commitment plan).” This suggests that Visa was aware of the high likelihood of being found in violation.
Junya Suzuki 2025-07-23 JST
I don’t think VISA’s improvement proposal will amount to much, but any attempt to bring VISA market abuses to light and address it is a welcome step. Also see Suzuki san’s Nikkei piece: “Visa ‘lock-in’ to be corrected: NTT Data’s exclusionary oligopoly, Fair Trade Commission sanctions” (Japanese and paywalled). The NTT / VISA feud continues…
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