JPYC Briefs Japan's Fair Trade Commission on "Payment Discounts" — The Value of Zero Merchant Fees Stops at the Invisible Wall of Card Merchant Agreements

What happened

On October 9, JPYC Inc. announced that on September 14 it had given the JFTC information on how the spread of stablecoin payments affects competition. JPYC charges its merchants no payment fees at all, because payment settles as a direct on-chain transfer from user to merchant. Some stores now pass the savings on as discounts, free shipping or points. Others hold back because they fear breaching their card merchant agreements. JPYC states that the submission is not a consultation or complaint about any specific case and that the views it published are its own, not the JFTC's. More than 150 merchants, across physical stores, mobile vendors and e-commerce, accept JPYC.

What the JFTC's 2022 report says

JPYC relies on the JFTC's April 2022 "Fact-Finding Report on Credit Card Transactions." The report examined three types of merchant agreement clause. No-surcharge clauses bar merchants from charging card users extra. No-cash-discount clauses bar them from charging cash users less. Anti-steering clauses bar them from encouraging customers to use another payment method. The JFTC said the first two may be problematic under the Antimonopoly Act, as trading on restrictive terms, where they risk dampening competition among merchants for customers. Anti-steering clauses may raise the same problem where they risk excluding other payment providers. The report found an average merchant fee of 2.83% for merchants that had never negotiated their rate and 2.42% for those that had. On a JPY 10,000 purchase, that means about JPY 240–280 in fees borne by the store. JPYC argues that the same reasoning applies equally to incentives for new payment methods.

The economics of "zero fees"

JPYC is an electronic payment instrument under Japan's Payment Services Act. Its issuer obtained funds-transfer business registration in August 2025. Issuance began on October 27, 2025, and cumulative issuance passed JPY 10 billion (about USD 67 million at JPY 150/USD) as of September 18, 2026. Reserves are held in bank deposits and Japanese government bonds, and both issuance and redemption are free. Income on those reserves is what funds the zero merchant fee, with three caveats. First, that income depends on the outstanding balance, not on cumulative issuance, and it moves with interest rates. Second, it must first cover the issuer's own costs: issuance and redemption, identity verification, anti-money-laundering controls and system operations. Third, merchants still pay bank transfer fees when they redeem into yen, and blockchain network (gas) fees remain. "Zero" means the absence of a card-style percentage charge, not the disappearance of payment costs.

Overseas precedents

Other jurisdictions have already written rules on the same question. In the US, the Durbin Amendment to the 2010 Dodd-Frank Act allowed merchants to offer discounts for cash, checks and debit cards. The EU's Regulation 2015/751 capped consumer debit interchange at 0.2% and credit at 0.3%, and also prohibited scheme rules that stop merchants from steering consumers to the payment instrument they prefer. In March 2026 the Reserve Bank of Australia decided to remove surcharging on eftpos, Mastercard and Visa from October 1, 2026, along with lower interchange caps. One model bans surcharges and pushes fees down; the other permits discounts and steering so that fee rates have to compete. Japan has not yet chosen either.

[Business Development Insights]

1. Recruiting merchants to accept JPYC, and the bank-issued stablecoins and tokenized deposits that will follow, takes more than technical integration. A legal review of the discount and steering clauses in existing card and QR-payment merchant contracts, offered alongside, can be the differentiator that decides adoption rates.
2. A model that funds zero merchant fees with reserve income depends on both outstanding balance and interest rates. Financial institutions that plan to issue a stablecoin, or to partner with an issuer, should model break-even from average balance and reserve yield net of issuer costs, not from cumulative issuance. That shows how long free acceptance for merchants can be sustained.
3. For card acquirers and payment service providers, a possible JFTC follow-up study that covers stablecoin payments is both a business risk and an opportunity. Revisiting discount and steering clauses early and adding stablecoins to a multi-method acceptance platform would change their position. Instead of being avoided by merchants over contract terms, they would become neutral infrastructure that widens merchants' choices.

[Sources]

Information provision to the JFTC on the competitive environment of the cashless payment market in light of stablecoin payments (JPYC Inc.) — https://corporate.jpyc.co.jp/news/posts/stablecoin-competitive-environment JPYC provides payment-market information to the JFTC and publishes its view on "JPYC payment discounts" (NEXT MONEY / neweconomy.jp) — https://www.neweconomy.jp/posts/615394 Fact-finding survey on credit card transactions (Japan Fair Trade Commission, April 8, 2022) — https://www.jftc.go.jp/houdou/pressrelease/2022/apr/220408.html Fact-finding report on credit card transactions, summary (Japan Fair Trade Commission) — https://www.jftc.go.jp/houdou/pressrelease/2022/apr/220408_pressrelease4.pdf Yen stablecoin JPYC surpasses JPY 10 billion in cumulative issuance (Payment Navi) — https://paymentnavi.com/?p=182688 JPYC EX surpasses 19,000 accounts and JPY 3 billion cumulative issuance (PR TIMES) — https://prtimes.jp/main/html/rd/p/000000321.000054018.html Interview with JPYC CEO Noritaka Okabe (CoinPost) — https://coinpost.jp/crypto/interview/jpyc-jpy-stablecoin-launch/ Summary of Durbin Amendment (FMI) — https://www.fmi.org/docs/interchange/Summary_of_Durbin_Amendment.pdf Cap on EU Interchange fees – New Regulation published (Osborne Clarke) — https://osborneclarke.com/insights/cap-on-eu-interchange-fees-new-regulation-published Review of Merchant Card Payment Costs and Surcharging – Conclusions Paper (Reserve Bank of Australia, March 31, 2026) — https://rba.gov.au/media-releases/2026/mr-26-10.html