Prepaid Payment Instruments and PSA Deposit Requirements in Japan: Implications for IAP Game Operators
Key Words: Japan Game Market, Mobile Game Publishing, Payment Services Act (PSA Japan), Prepaid Payment Instruments (PPI), In-Game Currency Regulation, PSA Security Deposit Requirement, Financial Services Agency (FSA Japan), Local Finance Bureau, IAP Compliance, Game Monetization Regulation, Cross-Border Game Publishing, Game Launch in Japan, Legal Affairs Bureau, Game Publisher Compliance Strategy, Japan Market Entry for Game Companies, Legal Compliance for IAP Titles, Game Localization and Legal Requirements, Mobile App Monetization Japan, Fintech and Gaming Compliance, Japanese Digital Economy Regulation.
I. Introduction[1]
Japan remains one of the most strategically important markets for global game publishers. It consistently ranks among the top countries worldwide in terms of consumer spending on in-app purchases (“IAPs”), supported by a mature smartphone ecosystem, high user retention, and a strong culture of digital entertainment consumption.
For international publishers planning to launch or expand pay-to-play or freemium IAP-based titles in Japan, it is crucial to recognize that Japan applies a financial regulatory framework that treats paid in-game currencies and other retained digital assets as “prepaid payment instruments.” This framework is governed by the Payment Services Act (“PSA”), which imposes specific obligations on issuers of paid digital assets, including notification requirements, periodic reporting, disclosure obligations and a mandatory security deposit covering a portion of unused balances.[2]
Among these obligations, this article focuses on the deposit requirements applicable to overseas game publishers offering IAP-based titles to Japanese users. It explains when a deposit obligation is triggered, how unused paid balances are calculated, what deposit schemes are available, and the common pitfalls encountered by non-Japanese market entrants.
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[1] This communication is provided as a service to our clients and friends and is for informational purposes only. It is not intended to create an attorney-client relationship or constitute an advertisement, a solicitation, or professional advice as to any particular situation. Further, the legal framework related to gaming and consumer protection laws in Japan is subject to frequent amendments and evolving regulatory interpretations. Readers are strongly encouraged to verify the most up-to-date information and seek advice from counsel before taking any action.
[2] For a general overview of the obligations under the PSA, please refer to our previous insights, Call of Legal Duty: Navigating the Payment Services Act for In-game Currency in Japan and Launching a Game in Japan: Legal and Practical Checklist for Overseas Publishers (Part 1 – Pre-Launch Preparation)