As more and more credit cards are being issued while people in Japan stay home and shop amid the novel coronavirus pandemic, issuing companies are running out of 16-digit combinations for card numbers, according to Mainichi.
There are about 280 credit card companies in Japan, a large majority of which issue cards with 16 digits as they partner with international brands like Visa, Mastercard and JCB. The first six digits represent the country, brand, and the type of card issuer and other elements. The remaining digits are handled by credit card companies themselves, and show information such as the account number and type of membership of the cardholder.
According to the Japan Consumer Credit Association, the number of credit cards issued in the country as of March 2019 was 283 million, and the total increases by about 2% each year. When looking at the amount of payments made through cashless transaction methods, credit cards account for 29.9%, greatly dominating the market compared to electronic money, which accounts for 3.9%, and payments using QR codes, which make up a mere 0.5% of the total amount.
The number of cardholders has climbed due to increasing indoor consumption after the coronavirus outbreak, in addition to the government’s campaign to encourage cashless transactions following the consumption tax hike in 2019, and it is feared that there will be a shortage in digit combinations from the seventh digit onward.
Furthermore, the industry has failed to address the issue sufficiently. Although there had been talks in a certain card company a few years ago to set up an in-house meeting to discuss the possibility of increasing card digits, the company decided to take makeshift measures such as reusing credit card numbers of discontinued cards after a certain period had passed since cardholders canceled their memberships. However, there are considerable risks of fraudulent usage, and a source close to the credit card industry said, „Increasing the number of digits is the only real way to deal with the problem. There will likely be a shift toward increasing the number of digits in the first half of this decade.”
A senior official of a card company commented, „Although we want to avoid increasing the number of digits as much as possible, I think that ultimately, our only choice is to carry the expense burden on our own.” The official added that negotiations with international brands are also essential, and that major and mid-size card companies need to fall in step with one another.
In the case that the number of card digits will be increased, it is necessary to discuss within the industry whether the 16-digit cards that already exist should all be changed into new cards as well, or if the two types can exist alongside each other. In either case, the industry will likely be driven to take elaborate preparations as the system will become complicated and may confuse consumers.
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