Mastercard – one of the global pioneers and leaders in innovative payment technology solutions – signed a Memorandum of Understanding (MOU) with Wakayama Prefecture in Japan.
The MOU seeks to leverage Mastercard’s global standard payment network to support the growth of the tourism sector and accelerate the digital transformation and cashless transaction infrastructure for small and medium businesses in the prefecture. This is the first time Mastercard has signed an MOU with a local government prefecture in the country.
This partnership is key in revitalizing the local tourism industry, which was hard hit by the COVID-19 outbreak.
In preparation for the 2025 Osaka-Kansai World Exposition, which is expected to trigger a spike in inbound tourism, the MOU will promote the digitisation of payments to create an enhanced experience for inbound tourists.
Mastercard, a global technology company with an international standard payment network, and Wakayama Prefecture, home to globally renowned World Heritage Sites, will form an infrastructure that allows overseas visitors to make seamless, cashless payments in regional cities. Implementation of global standards will be expanded in Wakayama with the aim of promoting cashless transactions and digital transformation in payment and settlement operations among small and medium-sized businesses in the prefecture. The two parties will also develop marketing content to attract tourists to the prefecture and its tourist attractions.
There are four key areas covered by the MOU, namely:
- Initiatives to Attract Inbound Tourists
In addition to its payment network services, Mastercard offers an analytics platform and consulting service that provides consumer behavior insights based on global data from 2.5 billion credit cards and 36.8 billion transactions per year. Wakayama Prefecture and Mastercard will leverage Mastercard’s insight on global tourism and consumption trends to collaborate on initiatives to attract inbound tourists. Furthermore, Mastercard will support Wakayama Prefecture in raising its profile as a tourist destination by collaborating with Mastercard’s overseas offices. - Measures to Increase Spending by Domestic and Foreign Tourists
Wakayama Prefecture and Mastercard will utilize Mastercard Travel Rewards, a cash-back program available to Mastercard cardholders worldwide, to attract foreign tourists to stores in the prefecture, and to encourage increased spending. Under the program, cardholders automatically receive cash rewards on eligible purchases at select merchants. The program should be effective in gaining interest from overseas tourists as it is available to cardholders in more than 30 markets, with many overseas banks and card issuers participating. For domestic tourists, Wakayama and Mastercard will work to increase consumer spending by promoting the prefecture’s numerous attractions. - Development of Tourism Content and Benefits
Wakayama Prefecture and Mastercard will use tourism resources, such as the World Heritage sites of Koyasan and Kumano Sanzan, to jointly develop unique experience-based rewards program for Mastercard cardholders, with such initiatives being used to promote the prefecture to domestic and overseas visitors. - Promote Cashless Payments and Digital Transformation for Payment Processes among SMBs
In cooperation with Mastercard card issuers, Wakayama Prefecture and Mastercard will promote the implementation of international standard cashless payments systems, including the introduction of contactless payments using IC cards and smartphones. In addition, both parties will promote efficient payments operations at companies in the prefecture through the use of technologies such as virtual cards, which allow companies to issue unique virtual account numbers with set usage conditions to optimize accounts payable efficiency, reconciliation processes and data analysis. This is expected to streamline billing operations, reduce the risk of uncollected payments, and expand sales opportunities to new customers.
According to Yunsok Chang, Mastercard Japan’s Division President, “The spread of COVID-19 has increased demand for contactless payments around the world, and the shift to digital and cashless payments is accelerating. As border restrictions ease, inbound tourism demand is expected to surpass pre-pandemic levels, and Mastercard is looking forward to working with Wakayama Prefecture to build a new model for attracting tourists. In order to increase Japan’s reputation as a successful tourist destination, I believe it is essential to avoid the ‘Galapagos effect’.
“This partnership will contribute to the further development and revitalization of Wakayama Prefecture, and the region, through the provision of highly convenient, international standard payment infrastructures and data-based solutions that can be used, stress-free, by overseas tourists. It will also promote the digital transformation (DX) of payment operations, aiding firms in the tourism sector, as well as other small and medium-sized businesses in the prefecture, in improving their operational efficiency and competitiveness by becoming cashless. By combining Mastercard’s resources and experience as a leading international payment technology company with Wakayama Prefecture’s tourism resources, I am confident the initiatives set out in this MOU will be highly impactful.”
Governor Nisaka of Wakayama Prefecture is optimistic about their partnership with Mastercard. “I am pleased to announce that Wakayama Prefecture is the first local government in Japan to sign a partnership agreement with Mastercard, one of the world’s leading technology companies, to attract domestic and overseas visitors and to increase consumption in the prefecture. We are looking forward to promoting Wakayama’s colorful tourism resources, developing attractive contents, and promoting the cashless payment system in anticipation of the end of the COVID-19 pandemic. We are confident that Mastercard, with its rich knowledge of international travel and consumer trends and its extensive network of overseas credit card companies, will be a strong partner for our prefecture. Through this MOU, we will work closely together to promote tourism and other sectors in our prefecture, and to ensure the sustainable development of both parties.”
