A Line Pay spokesperson agrees that the pandemic has had an impact. “In general, Japan is still a very cash-based society, relative to other markets, which is why people can still get by with cash with nearly all transactions.

While Japan was once famously reliant on paper currency, it is no longer a purely cash culture in 2026. Following a massive digital transformation push over the last few years, credit cards, "tap-and-go" IC cards (like Suica and Pasmo), and QR code payments (like PayPay) are accepted at almost all convenience stores, major retailers, and restaurants in cities like Tokyo and Osaka. However, Japan remains "cash-preferred" in specific contexts. You will still need physical yen for small temples and shrines, traditional ryokans in rural areas, coin-operated laundries, and many "hole-in-the-wall" ramen shops that use older ticket machines. Additionally, many small independent boutiques may still have a "cash only" sign. For a traveler, the best strategy is a hybrid approach: use your phone or card for 80% of transactions, but always keep about 10,000 to 20,000 yen in your wallet for emergencies or rural excursions. Interestingly, Japan has some of the highest-quality banknotes in the world, and many locals still take pride in using crisp, clean bills for formal occasions or gift-giving.