Payment Related

Which payment method is best for you? Advantages and disadvantages of various payment methods

In recent years, the number of payment systems such as smartphone payments and convenience store payments has increased rapidly. More payment methods are welcome as they are more convenient for consumers. However, on the other hand, it also leads to wondering which payment is advantageous after all.

Therefore, this time, we will introduce the outline of the main payment methods other than cash payment (a form of paying cash to buy products), and then consider the advantages and disadvantages.

Please use this as a reference when searching for a payment method that suits your consumption style.

Advantages and disadvantages of credit cards

Credit cards are one of the legendary payment methods, but they are still favored by many as a useful tool.

Payment methods other than cash payment are called cashless payment.

The composition ratio of all domestic payments in 2019 was 73.2{5f3ac39ba1b9031997b955ac72c92bb5456d725b06fa10f02cdda1ab745591c7} for cash payments and 26.8{5f3ac39ba1b9031997b955ac72c92bb5456d725b06fa10f02cdda1ab745591c7} for cashless payments (* 1). And 89.6{5f3ac39ba1b9031997b955ac72c92bb5456d725b06fa10f02cdda1ab745591c7} of cashless payments are credit card payments. Credit cards are a legend, yet they have a solid position.

(※1)Ministry of Economy, Trade and Industry “Cashless payment ratio in Japan”


The advantage of using a credit card is that there are many scenes where you can use it. Most major brand credit cards can be used at most stores.

And if you sign up for a credit card with no annual membership fee and choose lump sum payment when using it, no interest or fees will be incurred. You can enjoy the convenience of a credit card without having to carry cash, but the usage cost of 0 yen is a big advantage.

Credit card companies actively and regularly redeem points. Since points are given according to the amount used, you can get a substantial discount effect. In addition, online shopping (e-commerce) may not be possible without credit card payment.

A credit card may be one of the” things you have to have when you go out into society “..


The disadvantage of credit cards is that you lose the weight you pay in cash. People who understand the convenience but don’t use a credit card often say, “I don’t know how much I’m using a credit card.”

Also, applying for a credit card with an annual membership fee will substantially increase your shopping costs. If you pay in installments, you will be charged interest. However, these disadvantages can be eliminated by using and keeping in mind.

Advantages and disadvantages of smartphone payment

Smartphone payment is a payment method that allows you to make payments using the app downloaded to your smartphone. All you have to do is hold your smartphone over the cashier at the store to complete the payment.

However, the “source” of smartphone payments is credit cards and e-commerce. It can be said that smartphone payments have just changed the form of credit cards and electronic money to smartphones.

The advantages and disadvantages of credit cards are as introduced earlier. The advantages and disadvantages of e-commerce will be explained in the next chapter.


The advantage of smartphone payment is that you can use your smartphone. Smartphones are now work tools, hobby tools, and entertainment tools. With the addition of a function as a payment tool, it will become even more convenient.


The disadvantage of smartphone payments is that there are too many types. You may be wondering which is the best service for you.

Also, compared to credit cards, the number of stores that can be used is limited. Even if you can’t use a credit card smartphone app, there are many stores where you can use the credit card itself.

Therefore, the number of apps that have been downloaded but not used for payment will increase. It’s annoying when the app “traffic jam” occurs on the smartphone screen, and it’s a money-related app, so it’s difficult to deal with it.

For smartphone payment apps, you should download only the ones you really use.

Advantages and disadvantages of e-commerce payment

Electronic money is a mechanism for making payments by exchanging data.

Electronic commerce includes prepaid type (prepaid type) and postpaid type (postpay type). In the prepaid type, the procedure of paying money to have the electronic commerce charged, using the electronic commerce for that amount, and having the electronic commerce charged again when it is used up is repeated.

The prepaid type is similar to a credit card in that you pay for the money you spend later.


E-commerce is so popular that it can be used and conveniently used in many places.

In particular, e-commerce for transportation such as watermelon can be used for fares and other shopping, so people who use public transportation a lot can do it with this one. In addition, some e-commerce companies offer smartphone apps, and if you download them to your smartphone, you can use the functions of e-commerce on your smartphone.

As competition in the e-commerce industry is intensifying, e-commerce companies are increasing the point redemption rate to secure users. E-commerce users want to make sure they don’t miss any deals.


The disadvantage of e-commerce is that many companies provide services. In addition to the transportation system introduced earlier, there are supermarket system, convenience store system, and QR code system electronic money.

Advantages and disadvantages of direct debit (automatic debit)

Direct debit, so-called automatic debit, is also a cashless payment, even though it is a legendary payment.

Direct debit is a mechanism in which the money deposited in your bank account is “automatically deducted” and “automatically paid to the payee.” To perform direct debit, you need to make a contract. You can use direct debit to pay utility bills such as electricity, gas, water and sewage, and credit card companies.


Depending on the company, you can get a discount when you pay by direct debit. Alternatively, if you pay by a method other than direct debit, it may be expensive.

For companies that get paid, direct debit allows customers to save money because it saves them the trouble of billing and collecting money. We return the floating costs to customers by discounting the charges.


The disadvantage of direct debit is that you don’t feel like you’re paying.

Some people haven’t checked when and how much they have been withdrawn. So, for example, your bank’s deposit balance may be lower than you expected, and if you look closely, you may find that you are using more electricity than usual.

You should check your bank account statement at least once a month, as you can see when, how much, and where the debit was made.

Advantages and disadvantages of online banking

Internet banking is an internet service provided by banks to account holders, including payments.

Internet banking can be operated with a personal computer or smartphone. You can use all financial services such as transfer (settlement), transfer, balance inquiry, deposit / withdrawal statement inquiry, reserve, foreign currency deposit, investment trust, etc. just by operating the dedicated site.


The advantage of online banking is that you can use financial services at home, which were previously only available at bank branch offices and ATMs .

With online banking, you can see what it means for banks to reduce their branches. That’s how much the branch office business is becoming online banking.


The disadvantage of online banking is that it is easy to be a target of criminals because it deals with a large amount of money on the Internet. The Ministry of Internal Affairs and Communications warns the public about the use of online banking as follows (* 2).

  • The risk is increasing with the expansion of the use of online banking
  • Internet banking is one of the most targeted services of phishing scams
  • The trick is to identify yourself as a financial institution by e-mail and ask for your ID
    and password.
  • Never enter online banking information for emails

(※2)Internet banking system

Advantages and disadvantages of convenience store payment

The mechanism of bringing the payment slip to a convenience store and paying for the goods etc. with money is called convenience store settlement.

For example, when buying an item online, the seller may mail a payment slip to the buyer. The buyer uses the payment slip to settle (pay) at the convenience store.


The advantage of convenience store payment is that there are many places (stores) that can be used. You can pay while shopping. Even if you don’t have a credit card, you can pay in cash using the payment slip.


The disadvantage is that you can’t settle unless you go to a convenience store. In addition, payment using a payment slip will not be cashless because you will be paying cash.

Advantages and disadvantages of crypto asset settlement

Cryptocurrencies such as Bitcoin, Ethereum, and Nem are called crypto assets.

Cryptographic assets are a mechanism for using digital data like money. Cryptocurrency has no banknotes or effects. “Money” increases or “money” decreases only with the data in the Internet space and the computer.


The advantage of using crypto assets is that you can use ” future money “.

Cryptocurrency is now a business scale that drives the world economy, and central banks in developed countries are also beginning to research. The Bank of Japan has also announced that it will work on a demonstration experiment of digital passage, which is one of the crypto assets (* 3).

The scenes where crypto assets can be used are still limited, but it can be beneficial to get used to “future money” from now on.

(※3)Bank of Japan conducts digital currency experiment “early in FY21”


The disadvantage of crypto assets is that the value is ups and downs.

Even if you buy crypto assets in cash, you will eventually exchange them for cash. In other words, you will buy and sell crypto assets in cash, but if you buy crypto assets high and sell them cheaply, you will lose. Of course, if you buy crypto assets cheaply and sell them high, you will get a profit.

Therefore, crypto assets have become speculative targets. When the value of crypto assets rises and falls, it cannot be used stably as “money”.

Why not start with the one that suits your skin sensation?

It is very good to have more types of payment methods. This is because competition will occur in the payment industry and services will be enhanced.

With so many types, you should be able to find a payment method that suits your lifestyle, so why not enjoy using it?