Net Bank Update: JRE Bank＆Sumishin SBI NEOBANK

 The term "Net bank" has always seemed silly to me, as internet banks still have employees and presumably offices, and "normal banks" still have internet banking these days - so it's a relatively pointless line in the sand.  Money is mostly virtual anyway.  

That said, many so-called Net Banks don't have any branches that customers can visit.  Even Sony Bank closed their branch office due to Covid.  Since Mega-Banks have to pay rent for lots of huge offices, they tend to charge higher interest rates for loans, pay [even] lower interest rates for deposits, and charge more fees.

To stop from bleeding customers, some of the Mega-banks have started their own net banks.  For example, Mitsubishi launched Jibun Bank in a joint venture with au.  

Some people, especially the older generations, feel "safety" and "trust" with the famous mega-banks like Mizuho and Mitsubishi - but given that all accounts are insured with the government, there is no real safety advantage to having an account with one of these banks over a small regional bank or net bank.    

A more recent development is that some banks are offering their banking infrastructure and certifications for rent to other clients in much the same way that major mobile phone carriers offer their infrastructure for resale to others carriers.  

There were already a lot of companies participating in this, but most did not offer any special advantage, except if you bought a lot of stuff at a certain store.  For example, much as there is a Bic Camera Credit card, there is a "Takashimaya Bank", where it is just Shinsei SBI Neobank re-branded to Takashimaya bank.  Takashimaya is just a department store, so they don't actually have approval from regulators to create an actual bank, nor do they have the infrastructure, etc. - but they can outsource Sumishin SBI to offer a branded banking service and presumably all parties involved benefit.  (Note that the English word "Bank" has no legal meaning in Japan, so they can call themselves a "Bank" all they want, and it's just fashion).  

 Department stores aren't interesting to me - but you know what is?  Japan Rail.  Why?  Well everyone takes the train.  View Card is one of the best credit cards in Japan because the points you earn are JRE points, which can be used to charge Mobile Suica - rendering them effectively the same as cash.  No limited catalogs full of stuff you don't want that is super overpriced, no discounts on services you'll never use - none of that - just points you can spend as money anywhere.  

But what if you want to use a debit card instead of credit card?  Well Japan Rail East thought it was time to come up with a solution to this, and thus "JRE Bank" was born.  

It's a service offered by Rakuten bank, but it's separate enough that you can sidestep the usual "one account per person" restriction and set up an account with JRE bank even if you already have a Rakuten account.  

The main advantage over a normal Rakuten account is that you can earn JRE points by using your debit card, and depending on various conditions, such as setting your payroll to be deposited in your JRE Bank account, setting your View Card to deduct from there, etc., you can earn enormous discounts on train tickets.  

So, it's good for anyone who might want to take the train... which is basically everyone.   This has taken the Japanese internet by storm, but.. yeah okay so you get points and cheap train tickets.  This is great, but not even the best part to me.

See, I've had a longstanding problem:

1. I shop (and drink) at some places that only take cash.

2. I don't want to carry a lot of cash.  I want to set spending limits.

3. Because of the above, I need to go to the ATM often.

4. Most mega-banks offer free ATM service, but their ATMs have very limited operating hours, or are not so many in number.  (For example, SMBC Prestia ATMs operate nearly 24/7 and are always free to use, but they only have 14 ATMs in Tokyo).  Mitsubishi has more ATMs, and some of them are open late, but they charge 110 JPY after 9pm!

5. Most internet banks let you use Conbini ATMs for free (since they don't have their own ATMs), but only a few times per month.  After that, you have to pay.  

I like Rakuten, because it is the only bank I know of that lets you set a daily limit of less than 10,000 JPY on withdrawals, and it also lets you set times and locations where withdrawals can/can't be made.  

As an example, I can set the following:

a. Only up to 8000 JPY per day.

b. Only between 9am to 2am

c. Only in Tokyo or Kanagawa

This is a pretty good system to stop any kind of fraud or misuse, and also for even for threats and self control.  

But... if you are limiting yourself to less than 10,000 JPY then you will need to use the ATM more often.  This is exactly what I want - but I don't want to pay all the fees!  

If only there was a bank that let you set up such limits, but also had ubiquitous ATMs in many locations that were free to use for long hours.  

Enter JR bank.  Since it's based on Rakuten Bank's systems, JRE Bank allows the same sort of fine tuned security settings.  It also has a key difference from normal Rankuten bank accounts - unlimited use of View Altte ATMs.  Given that basically every JR station has a View Altte ATM, you can use the ATM for free most places you go shopping.  Sure, if you live near a subway station, there may not be a JR station nearby, but you will probably pass one on the way to work or shopping.  If not, you can also use Conbini ATMs for free a few times of month.  (Up to 7 times if you keep a massive amount of money with them).  

JR stations are also typically open long hours, typically closing after midnight and opening by 5am.  What's more, the ATMs are sometimes located on the outside of the station - in which case you can use them even when the station is closed.  W

In case there is no View Altte ATM and you use a Conbini ATM it will cost 220 JPY if you don't have any more free withdrawals left for the month, regardless of the time of day.  Not the cheapest or the most expensive.  

----

The other strong contender for ATM use is Sumishin SBI Neobank.  Just by setting up an account and linking it with your mobile phone, you can use the ATM for free 5 times per month.  

The first thing to know about Sumishin SBI is that being basically a net bank, they don't really have their own ATMs.  Having said that, you can use Conbini ATMs, Japan Post ATMs, and also View Altte ARMs.  Impressively, even when you don't have any free withdrawals left, they only charge you 110 JPY for using a Conbini or View Altte ATM - regardless of the time of day.  

Like Rakuten and JRE Bank, they also have a rank system where you can earn more free withdrawals based on various conditions, but the difference is that their terms are very generous.  

At the lowest rank, you only get one time for free, but all you have to do is log in with your smart phone to reach rank 2, which will give you 5 free withdrawals per month.  

Reaching rank 3 is still not too difficult, and will give you 10 free withdrawals per month for free.  I suspect this would be enough for most people.  

Rank 4 is a bit more difficult to reach for free, but you get 20 free withdrawals per month!  That means you could visit the ATM basically every weekday to withdraw your lunch money and still not pay any fees.  

Note: This was recently changed from unlimited to 20 times per month, so you know there were some people using the ATM three times per day or something.  

The easiest way to reach rank 4 without keeping a huge amount of money in your account is simply to pay for it by signing up for the  Platinum Debit Card (Mastercard).  The cost is something like 11,000 JPY (although the first year is free with some conditions).  

20 free withdrawals per month x 12 months = 240 free withdrawals.

11,000 / 240 = ~46 JPY per withdrawal.  

I am guessing that they are literally just charging what they are paying to the ATM providers.

Of course, since it's a platinum card, it comes with other dubious benefits like airport lounge access, vacation & mobile device insurance, etc.  The most important benefit (besides the increase in free ATM withdrawals) is that you earn points at a rate of 1%, and those points can be converted to cash back.  Granted, you would have to spend 110,000 on the card in a year to make the cash back actually cover the annual fee for the card.  

Still, if you want to use the ATM often, and are not near a JR station, then Sumishin SBI is a solid option.

Deposit Type Credit Cards in Japan

 The major international credit card brands (JCB, American Express, Visa, and Mastercard) are available in numerous types in Japan:

• Traditional post paid credit cards
• Prepaid cards that must be charged before using
• Debit cards that link to an existing bank account
• Deposit based (Secured) credit cards

Traditional post paid credit cards can help you build a credit history, but... in general they require a credit history.  One way to get such a card is to have credit history from other loans, etc., or to start with a store card before moving to a card with Visa, etc.  Some companies will take a risk by offering you a card with a small limit, and then slowly increasing it over time as you show an ability and willingness to pay on time every month.  

This is so because the card companies are taking a risk by loaning you the money you use for purchases every month.  If you are a foreignor, especially one with no credit history, banks may be reluctant to take such a risk.  Likewise, even some Japanese people will be deemed a credit risk, especially those with a history of missing payments, as well as those in debt reorganization or bankruptcy, or those who already have a high level of debt compared with their level of income.  

Prepaid cards and debit cards are a solution to this issue, but they don't help you to build credit since there is no loan taking place.  

This is where deposit based cards come in.  

With a deposit based card, you must sent a deposit to the card company once your application has been approved.  This deposit then becomes your credit limit, which the company can then use to pay off your bill in the worst case.  Because of this, the credit card company is taking on very little risk and will approve applications from most people.  The major exceptions would be if you have been flagged for malicious activity, money laundering, or outright fraud.  

However, the deposit will normally not be used unless you don't pay your monthly bill.  Typically the monthly bill will be automatically deducted from your bank account, so as long as there are funds in your account, the money you spend each month will be deducted in the following month or so, and your credit limit will be replentished.  Only in the case that a direct debit fails (for example if you close your bank account or there are insufficient funds) would the credit card company actually use your deposit.  

This is in contrast to prepaid cards, where you deposit money and then spend that money directly.  With a deposit style card, you pay the deposit, and then when you use the card that is a separate loan balance as with a normal credit card.  After the monthly billing period is over, the company will calculate your balance due and send an invoice or initiate direct debit for the that amount - without touching your deposit.  

Once the payment has been received, your credit limit will be restores, and you can make more purchases up to the limit again.  So, although you have given them a deposit, the spending does constitute a loan, and so using this style of card does build a credit history.  

Some things to note:

1. Yearly card member fees are typically higher than the fees for a "normal" credit card

2. The yearly fees typically increase with higher deposit amounts/credit limits

3. Some cards do allow you to apply for an "ETC Card", which can be used to pay tolls automatically on the highway.

4. Some cards offer special services such as travel insurance, etc., in the same way that many normal credit cards do.  

5. If you ever decide to cancel your account, then you will receive your deposit back, minus any unpaid balance due.  

Investing in Gold in Japan

 To most people in most countries, investing in gold (or other metals) is something they hear about, but not something they actually do.  

First, a brief primer on the benefits and drawbacks of investing in gold:

We'll start with the advantages:

a. Unlike Gold has actual intrinsic (real) value.  It's used for jewelry, electronics, dental work, industrial processes, investment (of course), and more.  Gold is something that people will always want for practical uses, and therefore it will always be possible to sell your gold.

b. Gold is a hedge against inflation.  If the Japanese Yen, US Dollar, or any other currency goes down in value, the price of gold will not drop, but in fact go up in relation to that currency.  For example, if the Japanese Yen goes down 50% tomorrow, then gold will simply cost 50% more - which is to say that any gold you are holding can be sold for 50% more.  Inflation in Japan has been close to zero percent for a long time, but that is starting to change recently.  

c. Gold is a hedge against currency exchange risk.  This is a variation on a theme, but if a currency drops reletive to other currencies, then you would be better off holding gold instead of that currency.  This isn't just academic, as the US Dollar rose significantly against Japanese Yen in the past year.  

d. There is a limited supply of gold.  Despite the best efforts of alchemists all over the world over the last several hundred years, gold can't be created from anything else in anything anywhere near resembling a cost effective method.  That means that we have what we have, and the earth has only a limited supply.  Since gold is useful and there is always a demand, the limited supply means that there is a floor on the price of gold.  This is extremly unlikely to change, barring the advent of efficient space mining.  

There are certain disadvantages, though, with some being country specific:

a. Gold doesn't earn interest, and it doesn't pay dividends.   When you buy a loan like a bond, you are funding a company or government, and they will pay you for the privlidge of borrowing your money.  Ideally the amount you are paid should outweigh any inflation.  Bank accounts, likewise, are in fact just a loan to the bank, so banks will pay you interest as well.  When you invest in stock, you are buying part of a business.  If the business does well, then the value of the stock will go up according to the company's growth potential or actual growth.  Companies like Sony, Toshiba, Hitachi, Google, Fujitsu, Apple, Amazon, and Rakuten earn profit and can pay dividends on a regular basis - whereas gold is just a lump of metal that doesn't "do" anything.  It mainly goes up in value only if new uses are found, or the market is fearful.  A box of gold bars sitting in your house also doesn't earn rent like a property can.  

b. At least in Japan, purchasing gold is not considered to be exchanging money like, say, FX trading.  Gold is considered a physical good, and not a monetary instrument.  That means that you must pay sales tax when purchasing gold.  The sales tax in Japan is currently 10%, so in order to make money by investing in gold, the value would have to go up more than 10% in order for the investor to recover what they paid in sales tax, plus all of the fees involved in buying and selling the gold.  

c. Spread and Transaction Fees.  Much like with currency exchange, gold dealers will charge a different fee to purchase gold than they sell it at.  This difference is called the "spread", and exists to allow the company to make a profit regardless of parket conditions.  On top of that, buying and selling gold is also not free.  Besides the spread between buy and sell rates that exists, most companies that deal in gold charge transaction fees for buying and selling.  This is probably to cover fraud, security, and testing.  In general, the smaller quantity of gold you are dealing with, the larger the fees become relative to the transaction amount - though it varies by company.  

d. Tax treatment.  Even if an investor buys gold, and the price goes up enough to make selling it profitable, a tax will be exacted on that profit  by the Government of Japan.  The tax rate is lower if you have held the gold for at least five years.  This rule is designed to discourage speculation, but it has the side effect that anyone who might need the money soon should avoid buying gold.  

e. Security.  If you have invested a large amount in physical gold, then you need somewhere to keep it.  Just like cash, you can keep it in "the bank", but then you may need to pay management fees to the gold dealer who is holding it.  

For the reasons listed above, many Japanese people would prefer to invest in stocks, bonds, property, or just keep cash.  

In some countries where the currency is less stable, there are fewer other opportunities for investing, or the tax regime is less strict, gold transactions are much more popular.  For example, in China, there are mom & pop shops that deal in "gold rice", which is very small rice sized pieces of gold of well less than a gram that anyone can buy or sell for cash without any ID.  

This makes sense, since the Chinese currency is not the most stable, and the same goes for the local stock market.  The government restricts transfers of money to other countries, and the huge property bubble that is collapsing as I write this isn't going to encourage people to invest there.  

It's also easy to buy the small pieces of gold little by little over time and build up a nice little nest egg.  

The situation is similar in many devloping nations, where people might fear hyperinflation or not trust the government or banks.  

In Japan, it's not super common for people to invest in gold.  There are multiple reasons for this, but probably the main ones are as follows:

0. Lack of need.  Japan's currency is relatively stable, people mostly trust the government, and there has been very little inflation over the past two decades.  This means that it's very unlikely for people to make their 10% back on the basis of inflation alone.  Instead, people who buy gold are more likely to be speculators rather than investors, or the very wealthy.    

1. It's difficult to know where to buy gold.  You can but it multiple places, even online shopping sites like Amazon or Rakuten, but the prices are always far above the market rate, and it's difficult to know if you might be getting scammed.  

2. Budget.  The average person might have a few hundred USD to invest at any given moment, but the more famous dealers charge high fees for small transactions, or only deal in large amounts to begin with.  

So the question becomes:  If you aren't super wealthy, and you are interested in investing in gold in Japan, how can you do it in a cost effective way?

Before getting to the most cost effective way, let's look at some of the less efficient alternatives:

1. Jewely and/or coins - You can purchase jewelry and/or coins at various small brokers and pawn shops in Japan, as well as online.  Typically the price you will pay is far above the price per gram for gold you will find listed on Google or Yahoo.  This is because the price will be affected by the "quality" of the piece.  The beauty, rarity, etc.  For example, a famous but rare limited edition coin may sell for much greater than the cost of the actual gold used to make it - in the same way that stamps can go for huge sums of money even though they are just pieces of paper.  Another thing to consider is that pure gold is very soft, and so therefore many companies will mix it with other harder metals in order to produce a metal with more ideal characteristics for making jewelry - This is where 18k gold comes from.  The result of all of this is that while investing in jewelry and coins might be a fun past-time for some people, it is not really the same thing as investing in gold itself.  Further, there is some small amount of worry about whether the items are indeed genuine.  

2. Purchasing gold ingots, etc. at small shops or online.  You can find gold ingots at some small pawn shops and gold dealers, as well as online, but buying something like 1 gram of gold, you are likely to have to pay twice the official market price.  The same thing goes for novelty gold gift cards, etc.  For anything purchased from a random seller online, there is a fair chance that you might be getting scammed.  

3. Investing in a gold related company - This is something many people have had confusion about.  People will invest in (for example) a gold mining company and then be surprised when the investment doesn't turn out how they hoped.  Investing in a gold mining company or a gold dealer means you are investing in a company, not in the gold itself.  Most of these companies will do well even when the price of gold is lower, but they will not track the performance of gold, and it a company goes bankrupt because of scandal, regulatory compliance issues, or something else, you will lose your investment.  

4. "Virtual" gold.  This is where you invest in gold online much like you can invest in foreign currencies with FX.  There is no specific gold assigned to you, and you can't actually take delivery of the physical metal in most cases.  All you can do is sell it.  This is probably fine in most cases, but just beware that if the company goes bankrupt, then they may use the gold (if they have it in their posession) to pay off debts to credtors, suppliers, tax liabilities, employees, etc.  If you really want to keep gold in case of an economic crash, then you might want to have the ability to covert your holdings into the actual metal you can keep in your house or a safety deposit box.  

5.  Other financial instruments: ETFs, Futures, or Options.   Basically speaking, Futures and Options can be used to hedge financial risk, or for speculation, but are not really suitable for long term investment.  ETFs vary widely based on how they are constructed, so research is warranted, but a gold related ETF may just be a basket of stocks for gold related companies.   

6. In person through a major gold manufacturers.  This is where you take cash and go to one of the three large gold manufacturers in Japan, and walk out with a gold Ingot.  This is the most efficient way to buy and sell gold, assuming you are needing to buy or sell large quantities.  The three different companies all have different spreads, and charge different fees.  Amusingly enough, Costco has a deal with one of the manufacturers, where you can actually walk  into Costco in Kawasaki and walk out with gold in your hand.  

7. Purchasing gold overseas.  You can certainly do this, but you must declare the gold when bringing it into Japan and pay import taxes.  If you do somehow sneak it in, it won't help you, because without proof of sales tax, you will need to pay sales tax when selling your gold to any reputable dealer.  Gives the word "Sales tax" a new meaning.  

And finally...

8. A gold investment plan.  These are designed to let you use Dollar Cost Averaging to purchase gold in relatively small amounts over time in an automatic fashion, just like a 401k allows you to invest a small amount with every paycheck.  

Before we get into the details, let's talk about the major gold manufacturers in Japan:

1. Mitsubishi Materials - This is part of the Mitsubishi conglomerate, which has related companies ranging from banks to automotive companies.  You can think of this as a manufacturing conglomerate and bank that decided to branch out into ingots.  

2. Tanaka Kikinzoku - Tanaka is basically a jewelry company that decided to branch out into the ingot business.  They do offer an investment plan, and deal in coins as well.   

3. Nihon Material - Nihon material is much like Mitsubishi Material in that they are in industrial manufacturer that produces gold plates, film, pellets, etc., for industrial customers, and also happens to offer ingots and an investment plan.  

Basically speaking, Mitsubishi is a famous name, and Tanaka is well known, so they both relatively low spreads, but charge very high fees for low quantities.  In fact, the last time I checked, Tanaka would charge a huge fee just to hold your gold.  This means they are only cost effective for those who have a lot to invest (at once, or monthly).  Nihon Material has a slightly higher spread, but it much more affordable in terms of fees.  

This reflects the current situation, and may change over time, so please do your research before opening an account.  

I'll only go over the Nihon Material plan in detail, since that will be the best option for most people.  

Application Process:  You need to open an account before you can go anything.  The gold industry is slightly behind the times, so you will need to fill out a form online, but they will then mail you an application form to fill in, and send back with copies of your ID and bank account information, along with how much you would like to invest monthly, and into which metals.  You can invest as little as 3,000 JPY (Around $30) per month, making this a plan truly targeted at all people.  

Once they have received your information and set up your account, they will send you another envelope with your login account and password information.  You can check your current invested and uninvested balance, and change your monthly contribution amounts, as well as request to buy, sell, or withdraw gold (more on that later).  

Let's say that you have some extra money burning a hole in your pocket - you can log in and purchase additional gold beyond your normal monthly contribution.  

Likewise, if gold is super high at the moment and you feel like you want to sell some of it, you can - just beware, buying and selling manually somewhat defeats the purpose of automatic contributions and Dollar (or Yen) Cost Averaging (DCA).  

The way the account works in practice is that every month on the same day, Nihon Material will withdraw the elected amount of money via direct debit from your bank account, and that money will go into your investment account and sit there as uninvested cash until the following month.  

When the next month rolls around, they will invest a little of the money each day, so that by the end of that month, they have invested all of it.  Since they only buy on business days, and the number of business days varies per month, and so does the purchase amount per day.  

For example, if you were investing 10,000 JPY (~$100 USD), then the daily investment this month would be 454 JPY per day.  If this month had more business days, then the amount invested per day would be less.  Likewise in a month with a lot of public holidays, the amount invested per business day will be more.   The important thing to remember is that the amount you invest per month is fixed, and they automatically deduct the cash and do the work of splitting it up into multiple daily transactions.  

The amount of gold you can actually buy for that amount will also vary by day.  This may cound confusing, so let's look at an example:

At today's rate, that 454 JPY would buy 0.04954 grams of gold.  That is close to 0.05 grams of gold, which means after 10 business days you would have 0.5 grams.  In a 20 business day month, you would get 1 gram.  This month has 22 business days, so it would work out to about 1.1 grams.  A gram is currently roughly a bit over 9,000 JPY so it roughly works out to something a bit more than 9900 JPY worth of gold, which sounds correct given our 10,000 JPY investment contribution example above.  

It's nice that they spli the purchase by day to give you the best average price, since the price of gold can sometimes change a lot in the course of a month.  It's even nicer that they do this without taking transaction fees every time since there are so many transactions!  

Everything that I have talked about up until now, you can also do with many online investment accounts, such as for example Crowd Bank.  Crowd bank will also let you set up an investment account with direct debit, and they will also split the amount up by day and automatically invest every day so you get the best average price.  Likewise, you can also do spot purchases and sales in addition to regular contributions.  

The major difference is this:

With gold manufacturers (including Nihon Material), you can actually withdraw the gold!  This means you can have the advantages of investing little by little with low fees, and also physically owning gold!  

Basically, the way this works is that you just apply to receive a gold bar online, and they will send it to you.

You can request 5g, 10g, 100g, with various options all the way up to 1kg.  

The 100g and up bars have no "bar fee", whereas the smaller bars do have them.  Given that the fees on something like 5g would be very significant in relation to the value, I would say that you should wait as long as you can before requesting a bar, with 100g being the best obvious choice.  If you are only able to invest a small amount, and a 100g bar would take forever, then perhaps 50g is not a bad option.

Warning: You probably want to avoid the larger bars like 1kg even if you are super wealthy.   Why?  Well, for tax reasons.  

As mentioned above, any gold you hold for more than 5 years can be sold with an advantagous tax disposition.  Besides that, profits below a certain amount can basically be ignored.  Each gold bar comes with a sales tax receipt and a serial number.  You can use these to prove the date of purchase, and that you have paid sales tax (otherwise you would have to pay it again!).  If you have a bunch of 100g bars, you could sell off a few every year to pay for your living expenses, starting with the older ones.

If you have a 1kg bar, then you have to sell the whole thing!  The bar may be less than 5 years old, and also it may have generates a huge profit or loss.  If it's generates a loss, then you probably don't want to sell it, but you might need to if you really need the cash.  On the other hand, if it's generated a huge profit, then you will immediately blow past the tax deductable amount of profit.  

You can get Nihon Material (or one of the other companies) to convert a 1kg bar into 100g bars, for example, but all of the companies charge a huge fee for this because they can.  Why can't you just sell your 1kg bar and buy 10 bars at 100g each?  Well, because then you are selling, and buying, so you have to pay the taxes mentioned above, plus sales tax again.  Ouch!  So as long as the companies keep their re-bar fees lower than that, then people will pay.  

So... avoid the smallest bars for fee efficiency reasons, and avoid the largest bars for tax efficiency reasons.  

I have left Tanaka and Mitsubishi out of the discussion because they have higher fees in general for smaller bars, so the extent that it seems like they are actively trying to discourage anyone who is not wealthy from investing.  Nihon Material offers you the chance to get your hands on real gold, while having a reasonable pricing structure.  

With the JPY falling against the dollar, inflation on the rise in Japan, gold rising to an all time high, and the instability in the financial markets as well as political instability recently, investing in gold might make sense to a lot of people.

Investing a huge amount of money at once while the prices is at historical highs hardly makes any sense, but neither does waiting - so an investment account with cost averaging is the perfect solution.  Whether you have $30 per month or $1,000 per month to invest, Nihon Material has you covered.  If you have more than that, then you might get a better deal with one of the other companies, since the spread potentially becomes a more significant factor vs. the fixed fees.  

Quick Guide to Prepaid Cards in Japan

 There are multiple types of cards commonly avaiable in Japan:

• Cash Cards (ATM Cards) - These can be used at ATMs to deposit, withdraw, and transfer cash, and sometimes with the J-Debit network to pay for things at a limited number of stores.  These cards serve the same purpose as passbooks that are used for some accounts, and you can typically have both on the same account.  
• "Normal" Credit Cards - These are cards with the JCB, Visa, Mastercard, or Amex brand that can be used to pay for goods and services.  Most of these cards support the contact IC (Chip & Pin) standard, and may also have a magnetic stripe.  In addition, most have anumber printed on them that can be used for online purchases.  "Numberless" (NL) cards without a number or mag stripe are becoming more common in recent times for purposes of fraud prevention.  Some allow creation of "virtual numbers" online.   Also, some cards support international contactless payment standards like "Visa Touch", and some support Japanese contactless payment standards like iD or QuickPay.  The major brands can also be used to charge prepaid contactless payment methods, such as Suica and Edy.  Typically, purchases made on a credit card are due in full the following billing cycle by default, though it is a common feature to be able to spread a payment out into N payments, where N may be anywhere from 2 to 24 payments.  Revolving payment plans are also supported by some cards.  Typically payments made with 1 or 2 payments are free of charge, whereas payments made over more than 2 months, including revolving payments charge interest or a service fee.  Some credit cards will alllow you to generate virtual numbers for online shopping as well.  We will cover credit cards in more detail in a future installment.  
• Debit Cards (often called Check Cards overseas, called "Shopping Cards" by many banks in Japan) - Besides the J-Debit feature sometimes supported by cash cards, Visa and JCB debit cards exist, which link directly to a bank account.  Sometimes these are issued as a separate card (as is the case for SMBC, Mitsubishi, and many of the larger banks), and sometimes you will be issued a combination cash card/debit card (as is the case with Sony Bank, Rakuten Bank, Prestia, Japan Post Bank, and others).  Some banks will not issue a physical debit card, but will issue virtual debit cards.  au Jibun bank follows this pattern, issuing a cash card, but allowing you to generate a credit card number in the app for online payments.  Like credit cards, debit cards may or may not support international and/or domestic contactless payments, and some banks allow the generation of virtual numbers.    
• Contactless IC cards (electronic money) - These are stored value cards that hold the value internally, not in an account.  They can purchased and used anonymously, and charged by cash or sometimes credit card.   Mobile app versions exist which will work on Japan market smart phones, and work the same way as the physical card in that they need to be charged before use.  These include Suica, Pasmo, Edy, Waon, etc.  Suica and Pasmo can be used for the bus and train, in addition to convenience stores, supermarkets, cafes, etc.  Almost all of these cards used in Japan are constructed using Sony's Felica technology, and are not compatible with NFC standards used in other countries.  
• Prepaid Cards (Prepaid Credit Cards) - These are essentially like debit cards, except they are deducting from a balance specific to the card, not directly from a linked bank account.  Some cards, however, can be set to automatically charge from a linked bank account if the balance is not enough.  Cash can not negerally be removed from these cards once charged.  Like credit cards, they will usually have a magnetic stripe, and may have contact (EMV) or contactless IC (Felica or NFC) chips.  All of the cards I am aware of have a card number for online shopping as well.   

Prepaid cards have the advantage of being generally easy to apply for and receive, as there is usually no credit check necessary.  They can be used for online payments, or at shops - but they can't directly be used to ride public transportation.  (They can generally be used to charge mobile Suica, etc., so they can be used indirectly for transportation).  

Prepaid cards also make budgeting easy, as you can put money into a prepaid card that you plan to spend for groceries, etc., to ensure you don't go over your limit, without worrying about using up the balance in your bank account that might be needed for direct debits, or receiving a large credit card bill in the future.  

Since prepaid cards vary in features, we will cover a few of the more common ones here:

SMBC Puripe (Prepaid)

This is Sumitomo Mitsubishi Bank's standard prepaid card.  (There are also ANA and Family versions)

Application: You don't need a bank account with them to apply, in fact basically anyone can apply online.  Technically, you need to have a mobile phone number / email address, and be at least 6 years old.  

Name: The card is issued with your actual name printed in Romaji on the front.

Brand: This card is Visa branded.

Contact IC: This is the only card I know of with a contact (Chip & Pin) IC.  That makes this card better if you plan to use it in person for large purchases, especially overseas.

International Contactless IC: Visa touch is supported on the card itself.  This will work in Japan but is only supported in a limited number of places and is usually inconvenient to use.  Better is the fact that this should work overseas as well.  Visa Touch is also supported on Apple Pay.  

Domestic Contactless ID: The physical card itself has no domestic contactless payment support, but if you register the card with Apple Pay or Google Pay, it supports iD.  Since a large number of shops support iD, this is quite convenient.  

Transportation IC: This card can be used to charge Mobile Suica.

Charge methods:

• Charge at 7-11 ATMs using cash.  No transaction fee.
• Charge online from the SMBC Prepaid site using an SMBC Credit Card.  No fee.
• Charge online from the SMBC Prepaid site using a non-SMBC Credit Card.  210 JPY Transaction fee.
• Charge online from SMBC Prepaid site using a bank account.  Works with most banks if you have net banking.  210 JPY Transaction Fee
• Charge from "V Point", if you have them. 
• Note: Credit card charges can be scheduled to charge automatically on a particular day of the month, or when the balance falls below a certain point.  

Balance check: The card has a QR code on the reverse, which can be used to check your balance without logging in.  This is super convenient, since it only takes a few seconds to check your balance.  You can scan the code once and save a bookmark on your phone, so that you can easily check the balance in the future without even scanning the code.  If you want to do anything else, such as charging the card or changing any settings, you will of course need to log in.  

Notifications: A mail will be sent when the card is used.  Optionally, you can set a monthly spending limit, over which another notification mail will be sent.

Design: This card is silver and rather plain looking, and in fact looks exactly like the normal SMBC credit cards, with the exception of "prepaid" printed in small grey lettering on the front.  The number is printed on the back of the card.  

Points & Cashback: 0.25% cash back, added to the balance on the 10th of each month based on the usage of the previous month.  

Maximum Balance: 300,000 JPY (~$3,000 USD)

Fees:

• Application / Initial Use: None
• Yearly Fee: None
• Charge Fee: Varies (Detailed above)
• Foreign Transactions: 4.07%

URL: https://www.smbc-card.com/prepaid/visaprepaid/index.jsp

Is Japan a Cash Society?

 One of the myths you will often hear is that Japan is a "Cash Society" - but is it true?  And if so, what does that even mean?  It's one of those things you hear all the time, but rarely see any hard numbers presented.  

I take it to mean that Japan is a country where most people use paper money and/or coins to pay for most things most of the time.  A more extreme interpretation might be that you can only use cash to pay for many of your day to day expenses.  If so, I don't think it's true at all.  

There are numerous types of payment you will see in every day life:

• Cash (paper money and coins)
• Direct Debits (From bank accounts) - Mainly used for utility bill payments
• Direct Deposit - Mainly for payroll and refunds
• Transfers between bank accounts - Often used to send money to friends, pay rent, etc.
• Contactless IC payment - Including Transportation cards such as Suica, ICOCA and Pasmo.  These can be prepaid (such as the transportation cards mentioned above), as well as cards like WAON, EDY and Nanaco.  Post-paid/realtime standards all exist, including iD and QuickPay.  These can typically be in the form of physical cards or emulated cards on smart phones.  For example, you can get a physical Suica card, or use Mobile Suica on your phone.  These are typically used for small purchases and transportation, and use Sony's Felica standard almost exclusively.  
• Credit Cards / Debit Cards - These are Visa, Mastercard, Amex, and JCB.  These use magnetic stripe, IC Chips (with contacts), and occasionally contactless (NFC) ICs, as in the example of Visa Touch.  Contactless payments via NFC is not so popular in Japan, as the above mentioned standards like iD and QuickPay are faster and already entrenched.  The advantage of these cards is that they can typically be used at overseas merchants.  
• J-Debit - Allows you to use a cash card from a bank to pay at the POS.  
• QR Code / Bar code / Mobile App payments - These hhave only become popular recently, and include things like Paypay, Yucho Pay, Rakuten Pay, au Pay, etc.  

You may have noticed that Checks and Money Orders are not on this list.  Technically the both exist, but they are not common for consumer use.  

First let me say that while the law technically stipulates that companies must pay in cash for employees who request this, most companies in practice require a bank account to set up direct deposit.  This means that for most employees, at least at large companies, they don't have paper money coming in, and need to go to a bank branch or ATM in order to withdraw cash if needed.  

Now let's consider common places where you might spend money, and what payment forms are accepted at each:

• Convenience Stores - Basically all types, excluding J-Debit.  Using a credit card is probably a slower method at many stores.  Many clients use cash, but Suica and iD are also very popular.  QR Code payment has become more popular in the past few years.  
• Resteraunts - Most proper resteraunts will accept credit cards, or cash.  Some will accept Suica and other IC cards, or QR-Codes.  
• Online shopping - Most all online shopping sites will accept credit cards, but often will accept bank transfers/direct debit, and some (such as Amazon) accept mobile Suica.  
• Supermarkets - (e.g. Summit, Queens Isetan, Kaldi, MyBasket, etc) : Almost all will accept cash, credit cards, Suica, iD, etc.  Many will accept QR code payments.  
• General Stores - (i.e. Donkihote, tokyo Hands) : Most will accept most of the payment types listed above.
• Drug Stores (e.g. Matumoto Kyoshi, Koko kara Fine, Tomod's) - Most will accept most of the payment methods listed above, including cash, credit, Suica, etc., and barcode payment methods.   
• Family Resteraunts (i.e. Jonathan's, Saizeria, etc.) - Most allow most of the payment methods listed above.    
• Home Centers (i.e. Shimachu Homes) - Cash, Credit, and depeding on the chain, other methods such as Suica, iD, QR code payments, etc.  
• Delivery (i.e. Dominos, Demaikan, Uber Eats, etc.) - Credit Cards, Cash, dPay.  
• Rent - Typically bank transfers, some larger companies may be able to set up direct debit.  Some smaller landlords might also accept cash.  
• Tax Bills, Utiltity bills - These can typically be set up to be deducted from your bank account or charged to a credit card automatically each month.  If you have not set these up, you will receive an invoice in the mail with a bar code.  These can be paid at convenience stores in cash, with Nanaco at 7-11, and with various other methods, including apps from the banks.  
• Electronics Stores (i.e. Bic Camera, Yodobashi Camera, Yamada Denki, etc). - Typically accept any method, including J-Debit.  BIC even accepted BitCoin for a while. 
• Furniture stores (i.e.  Nittori, Ikea) - Most methods.  Cash and Card for sure.  
• Dive Bars, very small cafes and resteraunts - Cash, sometimes more options.
• Small corner vegetable Sellers - Cash, maybe QR Code payments.
• Vending machines - Cash (coins or bills), Suica.  
• Taxis - Most in the city will accept Credit Cards, Cash, Suica, iD, and sometimes other methods.  Many of the larger companies also may accept barcode payments and/or have their own app.  Some are operated by individuals, and often these will only accept cash.  

I think by now you get the point.  

For eating a quick meal at a family resteraunt, or a quick trip to the supermarket or convenience store, cash is accepted, but most people pay by e-money (Suica, iD, or similar), or by Bar Code (PayPay, au Pay, or similar).  These are faster and more convenient than cash or credit cards, and the small amounts are handled efficiently.  

For charging at a fancier resteraunt, electronics store, furniture store, or general goods strore, e-Money and Bar Code payments can still be used, but for big ticket items, credit cards / Debit cards tends to dominate.  For example, Suica (and other transportation cards) can only store up to 20,000 JPY at once, so you couldn't use it to pay for a 500,000 JPY TV or bed.  Nanaco is likewise limited to 70,000 JPY.  Most bar code payment methods also have a limitation, whereas credit cards and cash have no practical limits.  

Small Shops

Some very small sellers like the mom & pop vegetable store on the corner don't accept anything except cash, or may accept only a bar code method like PayPay.  This is because they don't want to pay any transaction fees, and don't want to deal with a bank or get expensive cash registers or payment terminals.  Even Suica requires a payment terminal, whereas systems like PayPay only require a phone or a bar code sticker.  The sign up process is easier, and the introductory fees are lower. 

QR Code / Bar Code Payments & Consumers

What said, why has there been a boom in QR code style payments other than for small merchants?  On the consumer side, QR code payments are generally less convenient than using something like Suica - but in order to try to gain market share, the QR code/bar code companies have been running campaigns for the last year or so, offering 2% cash back and the like.  I suspect that once the promotional money for these campaigns runs out, the popularity will dwindle somewhat.  

The Suica Advantage

There are a few reasons why Suica (and other transportation cards) has enjoyed such longstanding popularity:

• Speed - Suica cards don't need to check in with the bank, the balance is stored on the card itself.  A suica card is designed to be used at a busy turnstile, and is specced to allow 10 people to enter per second.  That means a transaction, from start to finishes takes less than 0.10 seconds.  Some readers may think "so what if it takes a couple seconds..." - but when there is a line of people behind you, you want to pay and get out.  When there is a line of people in front of you, you want them to pay and get out, not be fumbling in their wallet, counting coins, unlocking their phone and launching apps, etc.  
• Flexibility - Suica comes in both mobile and card form, and you don't need to unlock your phone or open any app to pay.  Neither you nor the store  need an internet connection, either.  Suica can be charged from cash, or by other methods, such as credit card.  
• Privacy - You don't have to register a Suica card to your name if you want to be anonymous.  You aren't forced to give your name, address, ID, phone number, bank account, or any other information.  There is no contract to read and agree to either.  Anyone can buy a Suica card for $20, or create an anonymous Suica card in Google Pay as well.  As a result there are no restrictions on residency, age, citizenship, or anything else.  Truely anyone can get and charge a card any time they like.  You can of course register accounts for safety and convenience if you like.  
• Ubiquity - Pretty much every person in Japan has a Suica card, or compatible transportation card.  If you have it anyway, then it's convenient that you can use it to pay for small items.  
• Eki (Station) - Train stations are some of the most sought after retail locations for merchants, and some of the most convenient locations for consumers to do their shopping.  There are many shopping malls in these stations, like Atre, Ekichika, and many more.  A condition of renting space is that the store much accept Suica (or Pasmo, etc).  This means even stores that ordinarily don't accept Suica (like Starbucks) are strong-armed into accepting it at many of their locations.  As a result, when shopping in and around train stations, you can be rest assured that whatever else the shops accept, they will accept Suica for sure.
• Usefulness - If you have some remaining balance on some payment methods and you aren't going to use them for a while, the money is effectively useless.  For example, if you have 500 JPY left on your PayPay account, you may or may not be able ot use it.  Paypay is accepted many places, so you will probably use it, but if you have PayPay, dPay, au Pay, Yucho Pay, Rakuten Pay, etc., and have $5 on each... some may sit unused for a while.  You may decide to transfer the money back to your bank account in those cases - but with Suica, it's guaranteed that you can use it to ride the train, subway, or bus, which most everyone does from time to time.  
• No Mobile Requirement - Suica is supported on mobile devices, but as mentioned above physical cards are supported.  The phones simply emulate a physical card, which means they don't even need to have battery or internet to use an existing balance or charge from cash.  

At any rate, I have tried most of the payment methods out there, but I spend almost all of my money via the following:

1. My Bills are charged to my JCB credit card or direct debit from my bank account.  

2. I pay paper invoices by Nanaco (but I charge this with cash once per month)

3. I have an iD/Visa debit card, so I often use iD to pay at places that accept it

4. I use Suica around the station and places that don't accept iD (f.e. Kakuyasu)

5. I use the visa debit card's card number, or my JCB credit card's card number for shopping on Amazon and other online purchases (Using Suica to pay online is a minor hassle)

6. I use cash sometimes at small bars...

Actually, as a general rule, if a place doesn't accept Suica or iD, then I figure they must not want my money, and I don't generally shop there.  

I really don't use EDY or QuickPay, because I have found that most places will accept Suica or ID.  I never use Visa Touch because every place that accepts it accepts iD or Suica.  I don't use the visa (chip) feature of my card if the shop accepts iD, which most do.  JCB isn't supported by all overseas web sites, so I use Visa in those cases.  

At any rate, I only very rarely use actual cash, and I don't use PayPay or similar.  (I have set up some of these apps, such as au Pay and Yucho Pay, but don't really have an incentive to use them).  

So the idea that you need to use cash for most day to day expenses is simply false.  You can most likely pay for your coffee, groceries, cleaning supplies, online shopping and most everything else you want using some combination of Suica/iD, Credit/Debit, and bar code/QR Code apps.  

If you spend a lot of time in dive bars and buy all your groceries from mom & pop corner shops, you aren't likely to need to carry much cash.  That said, given that there are some places that only accept cash, I would always keep at least 2,000 JPY on me  - just in case.  

This is perhaps different than what I have seen in some other countries, where *everyone* accepted cashless payments.  For example, it is well known that these days in China, WeChat pay or Ali Pay is seemingly accepted even at the smallest food stalls and similar.  While everyone acts like this is some modern revelation, debit and credit cards are seemingly accepted even for the smallest payments in the US and some other western countries, while many southeast asian countries allow you to pay money through the mobile operator via SMS.  Meanwhile, Japan has had Suica and Mobile Suica since well before WeChat was a gleam in the creator's eye.  

Why Foreign Banks Can't Compete

 As I am sure most people know, banks accept deposits from customers, and then pay interest.  This costs the bank money.

Banks also typically lend money out for business loans, home loans ,and other types of loans on which they of course charge interest.  

Basically, the way banks have historically made profit is that they borrow money from depositors, lend that money out, charge interest, pay some percentage of that back to the depositors, and keep the rest for themselves.  

Here are some average numbers from the United States as of the end of 2022.

• Car Loan - 3.3% - 5.99%
• Savings Account - 3.3% - 4.35 %
• Standard Home Loan 5.5% - 6%
• Business Loans (bank) - 4.2% - 4.5%

As an example, an average consumer might put money into the bank, which pays them 3.3% interest.  The bank lends that money out as a home loan at 6%.  That gives them a 2.7% margin.    Since the banks have many millions of depositors, many thousands of home loans, and are operating billions of dollars, this more than covers their cost for renting expensive bank buildings and paying their employees, and leaves plenty of profit for returning to investors, expansion, etc.  

Sadly banks in the US have gotten into less honorable, but more profitable operations such as pay day loans, title loans, and credit cards - but we'll leave that discussion for another day.  

The point is: banks in the US, and in most countries, have a large customer base and a wide percentage point spread to work with.  

So how about Japan?

I'll use Mitsubishi UFJ Bank as an example: 

• Normal Deposit Account (Futsuu Yokin Kouza): 0.0010%
• Variable Rate Home Loans: 0.345% - 0.475%

Yes, you read that correctly: The interest rate they charge on home loans is less than half a percentage point in the most expensive case!  10 year fixed rate loans are closer to 1%, but that's still extremely cheap compared to most countries.  

These rates aren't special to Mutsubishi either.  As of this writing, Sony bank charges 0.397% (if you put a 10% deposit), and SBI Shinsei Bank charges 0.320%

What that means is that the bank has to lend out the money, collect the payments, pay their rent, employee payroll, IT fees, utility bills, taxes, pay for losses on bad loans, and then pay interest back to the depositors.  It's no wonder the rate on deposit accounts is essentially zero.  

If you are willing to lock your money away for a year or more, then you can get an increased rate of return, say.. 0.0020%!  

Having to live on a margin of less than 0.5% of interest requires massive scale and low costs.  A foreign bank operating in Japan is by its very nature likely going to have a small scale and higher costs.  

Because of this, the two main foreign banks operating in Japan both closed their retail branches in the past 10 years.  

HSBC closed all of their retail/consumer operations and fled a number of years back.  Their branches were simply closed as they said goodbye to their customers.  

Citibank also operated in Japan, essentially catering to rich foreignors, and also closed.  This was not just to profit crunch, Citibank Japan was punished by the Japanese government multiple times for dealing with the Yakuza.  

In the case of Citibank, though, SMBC Trust Bank took over the operations, absorbing citi Japan into  SMBC Trust Bank in 2015, and branding it "Prestia".

Because of this history Prestia is one of the only banks  where most everything is available in English, and one of the only banks to charge a monthly fee just for having an account (Depending on your balance).  

The Basic Bank Account in Japan - Opening An Account

If you want to open an account at a major bank, it is as easy as walking into the nearest branch - if you speak Japanese.   If not, you might want to bring a friend.  

Typically anyone can open an account, so long as you are a legal resident.  This means no tourists, but most anyone else.  

Since a basic bank account does not allow you to run a negative balance or borrow money, there is generally no credit check or credit history needed.  

You will be asked to provide identification, which for a foreignor might include your MyNumber card, Zairyu card, health insurance card and/or your passport.  You may be asked to provide a copy of your Jyuminhyo (residence record), which you can get from city hall.  They may ask for information on your employer as well.  Basically, the only tro real requirements are that you are a legal resident, and you will be in Japan at least 6 months.  

You may or may not be required to provide an Inkan (Stamp), so you may want to have that made up ahead of time.  Some banks will allow signature instead.  

There are two basic types of accounts

• Futsuu
• Tozan

All you need to know is that Futsuu means "normal".  This is the type of account msot everyone has.  You can accept direct deposits from your employer, and set up direct debits for things like electricity and gas payments.  

Most banks do not charge any monthly fee for maintaining an account, and don't charge any fee to open an account either - this means you can feel free to set up multiple accounts at different banks if that's useful to you.  

Typically a bank will not let you set up accounts at more than one branch, and will not let you set up more than one account of the same type.  This is one reason why people will often hold accounts at multiple banks.  

Technically, banks will pay you interest on your balance - but in practice, the interest rates are so low in Japan that you may as well consider the account to be interest free.  

You can of course earn slightly higher interest by opening a time deposit account (CD), but even then the interest is so low as to not be worthwhile for most people.  

Typically banks have no minimum balance, but you may get some perks by having a higher balance or setting up direct deposit for your paycheck.  Examples would be reduced ATM or transfer fees.  

Banks will offer you an ATM card, which you will probably want to accept.  There are various options, including the ability to use the ATM card at convenience stores such as 7-11.  You might have to pay more when you use a convenience store ATM, but they are usually located more conveniently than your bank's ATM corner, and almost always open 24/7.  

Manually Transferring Money

You can easily transfer money to anyone else's account using your ATM card, or online - so there is really no need for services like Vinmo or PayPal for domestic payments.  

The information you'll need to know to transfer money is the following:

• The financial institution name or 4 digit code
• The branch name or 3 digit code
• The account type (Probably Futsuu)
• The account number
• The account holder's full name in Katakana

If you know those pieces of information, you can transfer money from your account using your ATM card, or with internet banking.  You may need to at least be able to read enough Japanese to select the bank name and branch name from a list, or enter the first few characters into the ATM or internet banking.  

Once you have entered the bank, account type, and account number, one of two things will happen:

1. The ATM/web site will display the account holder's name in Katakana
2. The ATM/web site will ask you to enter the account holder's name in Katakana

Either way, the purpose here is to confirm that you didn't mess up the information and that the person (or comapny) you are sending money to is correct.  Once you have confirmed this, then the payment will go through.  Once you have sent the payment, the money is gone, and there is typically no way to get it back.  

The checks are typically done in real-time, but if somehow the payment was sent to an invalid account, the money would be returned within a few days.  Otherwise, the money now sits in the account of the person you sent it to.  

You can of course use this method to send money between your own accounts.  

Note: JP Bank uses a different system, but the account information can be transformed to conform to the system listed above.  

Transfers used to only take effect during business hours on business days, and could take several hours if you were sending to a different bank.  This meant that even if you sent money on a weekend or holiday, the money would not arrive until the next business day (even though it would disappear from your account immediately).  

Recently, there is a new "instant transfer" system being instituted at most banks.  This system will always transfer the money in less than 10-15 minutes between participating banks, any time of any day (unless they are undergoing maintenance).    You don't need to opt into this in most cases, it's automatic.  

Not all banks subscribe to this new system, though, so if you have an account that doesn't (like Prestia), then you might need to wait a bit longer for transfers to  clear.  

Where do you find the information for your bank, branch, and account number?  The branch and account number are printed on your cash card.  

Note that because you can just transfer money to anyone, any time: Personal checks aren't really a thing.  

Passbook  vs. Eco

Japanese accounts traditionally issue Tsucho (Passbooks), which can also be used at the ATM, and will print a record of your transactions.  More recently, banks are pushing "Eco" accounts, which do away with the passbook.  It's most cases, it's your choice.  You can usually get both a passbook and an cash card (ATM card) on the same account.  

Note that banks don't typically send statements since the idea is that you have a passbook instead, or reference your statement online if you have subscribed to Edo Tsucho.  Bear in mind that if you need an official paper record of your balance for a loan application, visa application, etc. and you have switched to a passbookless account, then you may need to ask for a balance statement printout.  This can be a hassle and take several days.  

Debit Card Features

Banks will also sometimes ask you if you want to have a debit card feature on your ATM card.  This has nothing to do with the "Check Card" type feature often offered by foreign banks where you get a Visa logo or something like that.  If a mega bank asks you about a debit card feature, they are likely talking about J-Debit, which is a system that lets you pay with your ATM card at some merchants, such as Bic Camera.  

The Check Card,  or Visa Debit card type feature  has also become available at many banks over the past few years.  This is typically called a "Shopping Card" by the big banks.  Sometimes this will be a debit card that has both a credit card number and cash card features, sometimes there will be two separate cards issued.  

I believe the reason for this is that the IC part of the card could be Visa, or Cash, but not both, so there was a decision to be made by the banks about whether to use only Mag Stripe for  one feature, or wanting to have the extra security of using IC for both.  

Another thing to consider is that like real credit cards, check card style cards have expiration dates, whereas normal Cash cards issued by Japanese banks do not.  The larger banks tend to issue the cash cards and shopping cards as two separate cards.

For example:

• SMBC offers a Visa debit card that supports both Visa contactless payment and iD debit.  It has an IC chip so you can use it at stores, and a number printed on it which you can use online.  It also has a PLUS logo on the back, which I believe means that it can be used for cash withdrawels overseas.
• MUFJ offers a Visa debit card that supports Visa contactless, but not iD or QuickPay, making it less convenient in Japan.  
• Rakuten bank offers Visa or JCB built into their cash card if you apply for it.  
• Prestia (SMBC  Trust) offers a multicurrency combined Cash & Shopping (debit) card that works with Visa Touch and iD Debit.  
• JP Bank recently started offering Visa debit cards as well, and their cards are integrated debit/cash cards.
• Sony bank offers a multicurrency combined visa debit/cash card.  
• su Jibun Bank only offers a basic ATM card, but their app will generate a virtual card with a number than can be used for online shopping, and QuickPay contactless payment from your phone.  

Most banks will issue a shopping card with Visa or JCB, and a few with Mastercard.  Some banks, like Rakuten bank will allow you to choose.  Being Japan, I would choose JCB if given the option, but if you plan to use the card overseas, then Visa or Mastercard may be a better option.  This includes if you want to use the card to pay for subscriptions to overseas web sites, etc.  (though bear in mind this won't work with some sites anyway, if they want to verify your address and don't support Japanese addresses).  

Some shopping cards will  support Visa Touch, iD, or QuickPay.  iD and QuickPay are the native Japanese options for postpaid (or in this case, real time debit) contactless payment, Visa Touch may work overseas.  Some cards even have both, or have one built into the card, but will let you set up the other on your phone.  You really want to get both, because iD and QuickPay are supported many more places in Japan than Visa Touch.  These options will deduct money from your account the instant that you use them, and so require a balance in your account, but they don't need to be charged.  

Some banks will issue cards that include other forms of contacteless payment, including Waon (Aeon Bank), Nanaco (Seven Bank), EDY (Rakuten bank), Suica (JP Bank and others).  These are all convenient, especially the Suica (since you can use it to ride the train), but they are prepaid, and have to be charged before you can use them.  You can charge the Suica and Nanaco cards at any 7-11 ATM, and of course Suica can be charged in train stations as well.  

It's interesting to note that a new trend is that many new credit cards are "numberless" (often called "NL"), meaning that they don't have any number on them at all, and there is no mag stripe.  They only work with an IC reader.  This means they can't be used for online  purchases, but they may allow you to generate temporary numbers on their net banking site or app.  This trend may filter over to debit cards in the near future.  

Apps

Most banks now have smartphone apps, though what you can do differs wildly between banks.  Some only allow you to check your balance, while others will act as an OTP, allow transfers, set up contactless payments, and sometimes even withdrawels/deposits.  In particular, PayPay bank and au Jibun bank both have apps that allow you to scan a QR code at the ATM and withdraw or deposit money without an ATM card.  

OTP Tokens

Many banks allow you to request onetime password tokens.  These will either be in the form of a physical token or a special app that allows you to generate a code which you must input to the web page in order to proceed with transfers, etc.  For example, Mitsubishi UFJ bank will give you a physical token or you can set up their app to generate codes.  Often times, the app will be free, but there will be a small charge for a physical token.  The physical token is better in some ways, as you won't need to worry about anything when upgrading your phone, and it isn't likely to be prone to hacking.  

Rakuten bank doesn't have an OTP token as an option last time I checked, but they send one time passwords to your email instead.

What the OTP token is required for, and how it is used also vary between banks.  For example, most banks just require you  to press one button and generate the code which you enter - but JP Bank requires you to enter the transferree's bank account number into the OTP in order to generate the token code.  When registering a payee for PayPay bank, you can decide whether OTP will be required to make transfers to this payee in the future, but some banks will just always require the OTP code for any transfer.  

Direct Debits

As mentioned above, direct debit can be set up to let money be withdrawn automatically by credit cards, utiltities, etc.  This is something that in general needs to be requested to the company in question, and they will forward you request your bank.  Your Inkan (stanp) is typically required for the paper form you must fill out.

Sometimes these forms can be filled out online, and after filling out the portion on the company's site, they will often forward you to the bank's site, where you will be required to log in, and probably enter your OTP.  

Some banks, such as PayPay will let you see a list of currently authorized transfers, and cancel them from the site.  Most banks, however don't have this feature.  

You can think of this as a "Pull" feature, as Tokyo Gas, Nuro Internet, Docomo Phone Service, etc., will initiate the transaction and "pull" the money from your account each month.  

You can also use your shopping debit card to set up payment for the comanies that support that - the main difference from a practical point of view is that shopping card transactions will show up on your online statement or passbook as something like "DEBIT 0234" instead of something more specific like "Tokyo Electric".  

If there is no money left in your account, there is typically no insufficient balance fee from the bank - the transfer simply doesn't go through.  Some companies will try the debit again at the end of the day, or the next day.  Other companies won't, and so you will need to then send them the money another way.  Usually this will mean either manually transferring the money to an account they give you the information for, or using a card to deposit the money.  (For example, if you have a Marui credit card, you can deposit money to pay off your balance using cash by using a Marui ATM at one of their department stores).  

Not all companies will allow direct debit from all banks.  For example, View Card will not allow you to set PayPay Bank as a direct debit source, but they will let you use MUFJ.  This is unlikely to be an issue if you use one of the Megabanks.  

Post Card Payments

Many bills will show up in your mailbox as postcard type pieces of paper with a bar code until you set them up to be paid some other way (such as the direct debit mentioned above).  These can include utility bills, credit card bills, tax bills, and more.  

The typical way to pay these is to take them to the convenience store and pay in cash (or Nanaco electronix money) at the cash register.  There are apps and banks that will let you pay these by scanning them with a smartphone app and deducting the money from your bank account.  

Automated Transfers

Surprisingly, most banks don't have "Push" features to automatically send money to other accounts.  Some, such as PayPay do, but these may incur transfer fees.  If this is important to you, you may want to have your pay deposited into the account with the automated transfer feature, and then this bank can send the funds elsewhere is required.  Obviously, when pushing money, the amount needs to be determined beforehand, so this can't really be used for things like utility bills which change every month.  It can be used for things like rent, however.  

Some companies will allow you to split your pay and have it split up and deposited into more than one account, but many don't want to deal with the hassle.  If your company supports it, this may be one option to fund multiple accounts.  Also, some companies allow you to specify one account for standard payroll, and another for bonuses.  

On the other hand, something that most banks do offer is automated import of money from other accounts.  These typically don't cost anything, but may be limited to once per month, and the timing is usually pre-determined.  For example, au Bank and PayPay bank offer the ability to transfer money from other banks on a regular basis, but this works something like this:  The money appears from the source account just like any other debit, on the 27th of the month.  The money appears in the destination account on the 4th of the month.  This type of transfer usually needs to be set up well ahead of time, and is intended for long term use, for example to move money to a account every month for savings purposes, etc.  

Real Time Debits

Some accounts and services have the ability to be linked in such a way that they will immediately withdraw funds from your account for aspecific purposes.  A good example of this is that most banks have a related company that operates brokerage accounts, and it is typically possible to set things up so that you can transfer money from your bank account to the brokerage account in real time in order to invest.  This feature is often called "Money Bridge" or similar.  For example, Rakuten Bank and Rakuten Securities can be used in this fashion.