Line of credit

Although there were over 300 million credit cards in circulation in Japan at the end of 2008, credit card usage is actually quite low. For cultural, regulatory and other reasons, Japan still remains a predominantly cash society. Furthermore, the way credit cards are used in Japan differs from overseas: in Japan, consumers use credit cards as charge cards, whereas in many other countries, the credit card is used as a borrowing device. Credit cards also face a big challenge from the fast-growing e-money segment.

Some credit companies are stepping up efforts to provide greater service, quality, convenience and flexibility for consumers to use cards. One of those is American Express. With more 92.4 million cardmembers worldwide, American Express has travel offices in more than 2,200 locations and a merchant network in more than 200 countries and territories.

American Express has had a presence in Japan since 1917 and it became really well known in the 1980s when Jack Nicklaus did a series of ads for the company. It is also heavily involved in philanthropic activities in Japan. The company promotes itself as a lifestyle company, offering an impressive array of membership rewards.

Heading up public affairs and communications for American Express in Japan is Misao Eddy. Prior to joining the company in 2007, she was with PR company Dentsu Burson-Marsteller and British Airways.

Japan Today editor Chris Betros visits Eddy at the American Express offices in Ogikubo to hear more about the company’s activities in Japan.

What is the image of American Express in Japan?

It is a prestigious and very well known brand. The company has been here for more than 90 years. When Jack Nicklaus was doing ads for the card in the 1980s, it was more for males in their 30s and 40s, and corporate execs who went overseas a lot. More recently, we have been focusing on women just as much.

Do you still use celebrities in your advertising campaign?

We used Ken Watanabe about three years ago and then Keisuke Kawata from Southern All Stars. Last year, we didn’t use any celebrity.

How do you differ from your competitors?

The big difference between us is that we issue our cards. Some international credit card brands don’t issue their cards; the banks do. They don’t know who their customers are. They also don’t have direct links with serviced establishments, which American Express does. So we know who our card members and merchants are.

How does credit card usage in Japan differ from, say, the U.S.?

Japan is still a cash society – about 85% of transactions are done by cash. So obviously, credit card usage is lower than in the States. Another difference is that in Japan, 95% of credit cards are really charge cards, which means you pay the total amount the next month. That is probably a safer business model than in the U.S. where you decide how much you pay every month, using your credit.

Japanese people have lots of cards in their wallets. Everyone wants to give you a card, from the DVD rental shop to the cleaner. However, consumers are getting a lot more savvy and now tend to select two or three main cards and accumulate their points and try to receive benefits.

What is the monthly average credit card transaction in Japan?

About 36,000 yen. There is still some reluctance among Japanese people to use credit cards at supermarkets and convenience stores, to pay their utility bills, in taxis, and so on. Instead, they feel they should use their American Express card at fancy hotels and restaurants. We are reaching out to our customers to advise them that they can use their cards more in their daily lives.

Do you have fairly extensive coverage in Japan?

I think we do. We have entered into a partnership with JCB which has expanded our penetration in Japan.

Is it difficult for non-Japanese to get an American Express card in Japan?

Card issuers rely heavily on credit bureau data to assess the credit risk of new applicants.　 Non-Japanese may have difficulties obtaining a credit card in Japan because they have little or no credit information available in the Japan credit bureaus.　Generally, though, if you have a bank account, we can issue you a credit card.

How is the economic downturn affecting business?

Everybody is tightening their spending and consumer confidence is shrinking. However, the number of transactions is increasing because people still use credit cards. In fact, the industry itself is growing as more people use credit cards instead of cash. One trend is that one-time payments might be smaller.

Tell us about your membership benefits.

If you’ve seen our billboard ads, you will have seen the tagline “More than just a card.” We provide lifestyle support and that means opening a window to hundreds of different benefits for cardmembers. You have easy access to different things to fulfill your lifestyle such as events, fashion shows, automobiles, luxury brands, home comforts, leisure, dining, travel and charity.

One of the top items of membership rewards among cardmembers last year was a vaccination program. For 150,000 yen, you earn 1,500 points and with that, you can buy three vaccinations for children in a developing country. One of our cardmembers even exchanged points for building a school in Cambodia.

Are traveler’s checks still popular?

Yes, we did tremendous business in traveler’s check last year. When the yen became high, people bought TCs in dollars. Some banks ran out of stock.

What corporate social responsibility (CSR) activities is American Express involved in?

We have three CSR themes – preserving our cultural heritage, community service and nurturing leaders for tomorrow. Through the American Express Foundation, we preserve cultural heritage sites all over the world. In Japan, the company donated $50,000 to the Nagoya Castle restoration project. We have supported the Hana Touro Festival in Kyoto, the Yuki-za traditional marionette theater and many others.

Our community service activities are very strong, since we have about 1,000 staff. Employees contribute to various community activities and as a company, we support that, sometimes with matching funds. Many staff groups are engaged in many volunteer activities, such as Make-A-Difference that involves runs and walks to raise funds.

How about the third theme of nurturing leaders for tomorrow?

This year, we launched the American Express Academy program. We selected about 20 NPO/NGO leaders and about 30 Young Entrepreneurs for this program that focused on building personal, business and leadership skills. We held the NPO/NGO program in March this year which was a great success, and we had one for entrepreneurs this month.

For further info on American Express’ activities in Japan, visit www.americanexpress.co.jp

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