In March 2026, Japan’s Ministry of Economy, Trade and Industry (METI) announced that 58% of the country’s consumer spending was now cashless. That’s good news for anyone who doesn’t want to walk around constantly holding a walletful of yen.
But that 42% leaves many small shops where cash is still king. Additionally, not everyone can participate in Japan’s cashless revolution: the majority of tourists are still shut out from the country’s dominant cashless payment system.
There’s another wrinkle here, too: what happens when a store’s cashless payment system goes down…and you have no cash to back you up? This isn’t a theoretical question: it happened to one poor shopper, and the store called the cops on him.
What do you do if you find yourself in a similar situation in Japan? Here’s what one Japanese legal expert said recently, along with our advice to travelers and residents.
System down, so store called the police
Three years ago, X user @M29633096 live-posted an incident at a restaurant. The poster ate a meal, intending to pay with the local cashless payment service d-barai, owned by NTT Docomo Financial Group (formerly a part of Docomo, the cellular communications company).
The problem? d-barai was down.
IC transportation cards, which also work as cashless payment systems, function as local wallets that work using NFC (specifically, Japan’s home-grown NFC chip implementation, FeliCa). The balance is stored on your card or phone and is synchronized with the server at regular intervals. By contrast, d-barai is a QR code/barcode payment system that requires connectivity to the server.
The user reported that they had PayPay and LINE Pay but no balance loaded, and that their credit card had failed at a previous location. Despite showing restaurant staff the app with the error code, a staff member still said they were going to call the cops. For some reason, they thought the user was running a dine-and-dash scheme.
Ultimately, an officer did come and escorted the man to an ATM where he withdrew cash. Even after paying, though, the restaurant staff member demanded that he apologize. He refused, saying a system error wasn’t his fault.
Cashless advances in Japan, but some merchants rebel
Japan has made leaps and bounds in cashless support since I started writing about the issue. Credit cards account for the majority of cashless payments at 82.7%, while electronic code payment apps like PayPay account for around 10.2%.
Officially, Japan is aiming for 80% cashless payments nationwide, with a goal of 65% by 2030. At 58% today, it’s well on the way there.
Not everyone is happy with the rush to cashless. And when I say “everyone,” I mean merchants.
According to Teikoku Databank, cashless payment fees at retailers have risen from 1.41% of sales to 2.04%, a 45% increase. Restaurants have fared even worse: they’ve seen their fees jump from 1.54% to 2.94%.
The economics of cashless don’t work for many small businesses. Take ramen shops, which operate on hideously thin margins. One ramen shop in Hyogo Prefecture, Kirimei, noted that, if it took cashless payments, it would add 200 yen ($1.25) per sale, pushing their signature ramen bowl from 750 yen ($4.70) toward the dreaded 1,000 yen wall ($6.30). It would also cost them ¥300,000 (~$1.9K) to upgrade their ticket machines.
In the end, Kirimei has decided to remain a cash-only business. Some businesses wish they could emulate. On X, one third-generation flour miller wrote, “You have no idea how painful it is to have 3% of your sales taken. Customers who pay cash start to look like gods.”
The fees are so bad that a few high-profile businesses have reverted to cash-only. GGC, a Gunma steakhouse chain, the Daiei supermarket chain, and the Sendai supermarket Seisenkan Murauchi are three examples of businesses that have abolished electronic payments.
Many tourists still love cash
Despite this, many tourists, conditioned to regard cash as king in Japan, are still paying the old-fashioned way. The Japan Tourism Agency’s inbound consumption survey microdata for April to June 2024 found that 94.5% of respondents used cash at some point in their trip. 74.5% used credit cards; only 31% used some form of electronic money.
One factor driving cash for tourists? The lack of access to domestic cashless payment options. Many small shops support the QR code app PayPay but not credit cards, because PayPay offered them low initial transaction fees to join. PayPay can also be used with no equipment: shops looking to save money can put up a QR code placard that customers scan to make a payment.
The problem for tourists? Most can’t access PayPay, as it requires a Japanese phone number to register.
That’s changing, though. PayPay estimates that its tie-up with Alipay, the dominant form of electronic payment in Asia, means 80% of tourists can now pay at PayPay’s merchants using their own home-country payment service. The company is also in the early stages of an experiment with US credit card giant Visa in California, which could eventually lead to deeper Visa/PayPay integration in Japan.
What happens when you can’t pay?
So what happens if you find yourself in a restaurant or shop unable to pay because you have no cash?
Legally, discovering you can’t pay isn’t a crime. It’s a debt. It only becomes a crime if you lie and attempt to flee. If you say “I forgot my wallet, let me go get it,” and then don’t come back, that’s a deceptive act (欺罔; gimō) under Article 246 of Japan’s Penal Code.
Lawyer Kitamura Shinichi, a representative attorney at Makoto Law Office in Osaka, states what the law actually requires: “You ate having deceived the shop, with no intention of paying from the start.”
The best thing to do, Kitamura says, is to do what you can to assure the store you’ll come back with cash. “To put the shop at ease, the basic approach is to show ID such as a driver’s license or My Number card, and give contact details including your name, phone number, and address.” The store may also ask you to fill out a contract as a promise of payment.
Our advice? Always carry cash in Japan. That way, you always have a backup if you suddenly find yourself in a cash-only shop. The article suggests carrying at least a 1,000 yen (~$6.30) bill; my general advice to my guests is to keep 20,000 yen (~$125), two 10,000 yen bills, at all times.
Additionally, grab a coin purse to hold change. As an American, I’m used to change feeling worthless or even disposable. In Japan, it’s very common to receive 100 and 500 yen coins (~$0.63 and ~$3.13) as change, and it becomes real money pretty quickly.
Need more Japan travel tips? Sign up for our free five-day Japan trip planning guide, where we discuss more gotchas that many first-time travelers never consider before they learn the hard way.
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d払いが使えなくて無銭飲食容疑で警察呼ばれた。銀行でお金下ろしに行くって言っても逃げる気だろの一点張り X（@M29633096）
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