Japan Automated Teller Machine Market Assessment, By Type, By Solution, By Application, By Region, Opportunities and Forecast, FY2018-FY2032F

Japan automated teller machine market is projected to witness a CAGR of 5.41% during the forecast period FY2025-FY2032, growing from USD 2.41 billion in 2023 to USD 3.67 billion in FY2032. Factors such as Japan ATM market, including the highly cash-based economy, despite the global trend towards digital payment systems. Large numbers of international tourists have meant that many ATMs are fitted out with multi-language software to assist foreign visitors in everyday transactions. Newer technologies in these machines have changed security and user experience, from smart ATMs to biometric authentication. Mobile ATMs are being provided to increase access to banking in the most remote and disaster-prone areas, while urbanization increases demand within densely populated areas.

Although the use of digital payments is growing around the world, the high reliance on cash in Japan, more than 60% of transactions are cash-based, continuing to drive demand for ATMs. In addition, the growth in inbound tourism has led to greater usage of ATMs by international visitors who experience challenges and difficulties with using local digital payment systems and thus prefer cash. In these respects, the ATMs now have multilingual software to accommodate such tourists. Technological innovations, moreover, further increase the use of ATMs. Smart ATMs, mobile ATMs, and security features, such as face-to-face recognition and biometrics authentication, further focus on factors of convenience and security that replace obsolete machines. Also, in Japan, the concept of Omotenashi, which embodies the spirit of exceptional hospitality and attentiveness, significantly drives the growth of the ATM market. This cultural value emphasizes anticipating and meeting the needs with meticulous care and consideration. In the context of ATMs, Omotenashi translates into offering superior customer service through advanced technology and user-friendly features.

For instance, in February 2024, Digital Wallet Corp., a fintech company, acquired Seven Bank Ltd.'s international money transfer service Seven Global Remit Ltd. With this acquisition, DWC's Smiles Mobile Remittance app users will have access to Seven Bank's ATM network. Foreign workers in Japan can access more than 50,000 ATMs in the country to send remittances back home.

Impact of Tourism on Japan ATM Market Growth

Japan ATM market sees a considerable contribution to its growth from the vast tourism industry. The country, with its growing influx of international tourists, sees many travelers depending heavily on an ATM for cash withdrawals, mainly when any local digital pay systems don't support their mobile phones. ATMs are a convenient way to obtain Japanese yen directly from a home bank account. In most situations, the rates are more favorable than traditional currency exchange counters, whereby tourists can go on vacation with less cash. Also, quite a few Japanese ATMs are multilingual, supporting at least three languages, English, Chinese, and Korean, for international visitors' convenience. These high-security standards include biometric authentication and anti-skimming features that further reassure tourists about the safety of their transactions. Thus, this combination of accessibility, convenience, and security makes ATMs part of the basic tourism infrastructure in Japan.

For instance, in March 2024, over 3 million foreigners visited Japan, breaking the record for the most inbound tourists within a single month, according to the Japan National Tourism Organization (JNTO).

Rising Technological Advancements to Drive Market Growth

Japan ATM market has undergone changes regarding technological development, including the introduction of biometric authentication, fingerprint, and palm vein scanning for added security against unauthorized access and improvement in user experience. ATMs have now been introduced, allowing users to interact with bank tellers using video conferencing to perform more personal or complex transactions. Integration of IoT and AI further brings efficiency and improvement in performance, enabling real-time monitoring and predictive maintenance to minimize downtime. Furthermore, smart ATMs have been introduced to cater to users with special needs by providing voice guidance and touch screens displaying larger fonts to ensure greater accessibility and inclusivity in banking services.

For instance, in August 2024, OKI Circuit Technology launched a new ultra-high-multilayer PCB production line at its Joetsu Plant in Niigata Prefecture, beginning full operations. The new PCBs are designed for semiconductor manufacturing and testing, catering to AI, data centers, and next-gen communication networks. It supports a high precision via a pitch of 0.23 mm and boosts production capacity by about 1.4 times, allowing for a wider variety of products in smaller quantities.

On-site ATM to Dominate Market Share

On-site ATMs are the most available and accessible machines in Japan. They were placed at convenience stores, banks, shopping centers, post offices, train and bus stations, and airport terminals for the public to access them at any time. Notably, most of the on-site ATMs, specifically those at major convenience store chains, such as 7-Eleven and Family Mart, and even at post offices, accept international cards. Services are quite frequently available in multiple languages, including English. It greatly opens their access to natives and international visitors. Furthermore, the advantage of ATMs based in convenience stores includes the fact that these operate on a 24-hour basis, which further facilitates convenience for anyone who needs it. This broad and stable reach has made on-site ATMs the most favored choice in Japan.

For instance, in August 2024, convenience store ATM operators are expanding their reach beyond stores to include regional banks, supermarkets, and hospitals as traditional banks cut costs by removing their ATMs. Seven Bank and Lawson Bank are leading this expansion, with Seven Bank replacing some Fukui Bank ATMs and planning to operate around 500 ATMs with partner banks by March next year. This shift is enhancing the role of convenience store ATMs as vital social infrastructure, offering features such as cash deposits for payment apps and improving overall user convenience.

Central Region Dominates ATM Market

The Central region, which includes the Kanto region that houses Tokyo, highly dominates the market for ATMs due to its highly dense population and vibrant economic activity. Therefore, Tokyo, being the capital, has the highest concentration of ATMs found on each block corner in convenience stores, banks, post offices, train stations, and shopping areas to meet the demand for locals and tourist influx. In turn, Yokohama is a port city with high density in commercial areas and transportation hubs. Besides, due to its proximity to Tokyo and Narita International Airport, Chiba hosts several ATMs for citizens' needs and international travelers.

For instance, SMBC ATMs are conveniently located throughout Japan, especially in major cities such as Tokyo, Osaka, Nagoya, and Kyoto. They are found in high-traffic areas such as major train stations, including JR and subway stations, making it easy for travelers to withdraw cash on the go. Additionally, SMBC ATMs are situated in large shopping centers and malls, ensuring easy access to cash while shopping.

Future Market Scenario (FY2025 - FY2032F)

The integration of advanced technologies such as biometric authentication, contactless transactions, and enhanced security features is expected to continue. These innovations will make ATMs more secure and user-friendly, encouraging the replacement of older machines.

Development and deployment of mobile ATMs are expected to drive growth in the market. These are quite useful in remote locations and during the occurrence of a natural calamity, when most ATMs may not be accessible for offering essential banking services.

More foreign visitors to Japan would, therefore, automatically mean more multilingual ATMs and machines accepting overseas cards. This could imply more ATM installations in tourist areas.

The extensive use of cash for payments in Japan notwithstanding, the government is contemplating going cashless in the times to come.

Key Players Landscape and Outlook

There is fierce competition among domestic and international players in the Japanese market, each trying to use some unique strength to win a market share. These are attributed to a great deal of technological innovation for which many firms have invested intensively in R&D in advanced features such as biometric authentication, contactless transactions, and other additional security measures. Differentiation through full-service support becomes crucial. Many vendors are making their products more viable by offering extensive managed services, including maintenance and cash management services that make the ATMs highly reliable and well-supported. With technological foresight added to strong service support, Japan ATM market will wear a dynamic and competitive environment.

In September 2024, Fujitsu Limited and MoBagel Inc. announced that Fujitsu provided AI technology from its Fujitsu Kozuchi service for use in Decanter AI, an AutoML platform developed by US-based AI startup MoBagel Inc. This new solution, designed to accelerate AI-driven predictions, will be available globally starting in September and is born out of a strategic partnership between the two companies.

In August 2024, Diebold Nixdorf announced that it is the first ATM solution provider ready to support the Microsoft Windows 11 IoT Enterprise LTSC 2024 operating system. It includes a range of new features that enhance security, speed, and usability for financial institutions and is available for order today with any DN Series device equipped with the latest processor.