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Finance

Foreigners in Japan find new credit cards just for them

Underserved market takes on new appeal as immigration rises

A supermarket in Tsukuba, a university town northeast of Tokyo: Even in cash-loving Japan, life without a Japanese credit card can be difficult. (Photo by Kento Hirashima)

TOKYO -- Mehmet Ciftci, a 28-year-old from Turkey working at a startup here, has struggled to obtain a credit card despite his steady job and bank account.

"I don't know why my application was denied, and they're not telling me the reason," said Ciftci, explaining that he had applied twice for a major bank credit card.

He is not the only member of Japan's growing expatriate population expressing frustration with access to financial services. Making online purchases or paying utility bills can be difficult with a foreign-issued credit card. But recent moves show that some financial companies see people like him as an untapped market.

J Trust, a Tokyo-based financial group with operations in South Korea and Southeast Asia, begins issuing credit cards this month geared to international students and foreign workers in Japan.

The cards will require a deposit of 50,000 to 300,000 yen ($460 to $2,760) to protect against losses should cardholders leave the country with unpaid card debt. The company aims to issue 10,000 of the cards this year.

Banks are also targeting the underserved market segment. Seven Bank, part of Seven Eleven Japan parent Seven & i Holdings, and Shinsei Bank formed joint venture Credd Finance last month to offer small loans and credit cards to expatriates, starting this year.

The new venture will tap the expertise of majority owner Seven Bank, which has offered an international money transfer service to foreign residents since 2011. The bank handled 1.14 million remittances in fiscal 2018.

A spokesperson for a major credit card issuer said that foreign applicants "are in no way screened more strictly just because they are foreigners." In the past, the industry saw a rash of international students leaving the country with outstanding debts.

Foreign residents have emerged as a rare patch of growth in financial services in aging, overbanked Japan.

Japan had roughly 1.65 million foreign workers in October 2019, up from fewer than 500,000 in 2008. The government expects to grant special work visas to about 345,000 people in 14 sectors over five years under the eased immigration control law that took effect in April 2019.

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