JCB

JCB is a payment card brand and network based in Tokyo. The company was founded in 1961 as Japan Credit Bureau and is the only international card brand to originate in Japan. It issues credit cards to consumers and businesses in Japan, signs up merchants to accept them, and licenses banks and finance companies in other countries, mainly in Asia, to issue and accept cards carrying the JCB mark.

JCB belongs to the small group of global card schemes alongside Visa, Mastercard, American Express, Discover and UnionPay. It is much smaller than the largest of these outside its home market, but it has a leading position in Japan and a presence wherever Japanese travellers spend. JCB Co., Ltd. is privately held, with Japanese financial institutions among its shareholders.

The company was established by a Japanese bank and a consumer credit association in the early years of the country's card industry, and it grew with domestic consumer credit through the 1960s and 1970s. With no access to an existing international network on terms it wanted, JCB chose to build its own. It began international operations in 1981, signing merchants in the destinations most visited by Japanese tourists and later licensing foreign institutions to issue JCB cards to local residents.

Expansion abroad concentrated on East and Southeast Asia, including China, South Korea, Taiwan, Thailand, Vietnam, Indonesia and the Philippines, and later India and other markets. Outside Asia, where few local residents hold its cards, JCB relied on partnerships with other networks to make its cards usable.

In Japan, JCB works in a way close to the three-party card model: it acts as card issuer and as acquirer, holding the relationship with both the cardholder and the merchant. It also works with franchise partners, Japanese banks and card companies that issue JCB-branded cards under their own names and share in the acquiring business.

Outside Japan the model is closer to that of the bank card schemes. A subsidiary, JCB International, licenses local issuers and acquirers, sets the operating rules, runs the authorization and clearing network between them and settles the resulting positions. Issuers in several countries offer JCB as the international brand on domestic credit and debit cards. Revenue comes from cardholder and merchant fees in Japan and from licence and network fees elsewhere.

JCB's reach abroad depends heavily on reciprocal agreements. Under a long-standing arrangement with Discover, JCB cards are accepted at merchants on the Discover network in the United States, and Discover and Diners Club cards are accepted at JCB merchants in Japan. JCB has comparable agreements with American Express in some countries and with UnionPay, as well as with national schemes and acquirers that route JCB transactions over their own infrastructure.

For a merchant, this means JCB card acceptance often arrives through another network's contract instead of a direct relationship with JCB. Online merchants selling to Japanese customers usually enable the brand through their payment service provider, since a large share of Japanese credit cards carry it. In-store acceptance outside Asia is patchier and tends to be strongest in tourist areas, airports, hotels and luxury retail.

JCB takes part in the bodies that set card industry standards. It is one of the owners of EMVCo, which manages the chip, contactless, tokenization and online authentication specifications, and it was a founding member of the council that maintains the PCI DSS security standard.

• Card numbers. JCB cards usually have sixteen digits and begin with 35. The leading digits form the issuer identification number, which is how a terminal or gateway recognises the brand and routes the transaction.
• Online authentication. J/Secure is the brand's programme for EMV 3-D Secure, used to verify the cardholder during e-commerce payments.
• Contactless. JCB supports contactless payments under the EMV specification and also developed QUICPay, a contactless service widely used at Japanese retailers and available through mobile wallets.
• QR codes. The company operates a scheme that standardises QR payment acceptance in Japan across many domestic wallet providers.

In Japan the credit card business is governed mainly by the Installment Sales Act, administered by the Ministry of Economy, Trade and Industry, which requires registration of card issuers and of acquirers and imposes duties to protect card data and screen merchants. Lending on cards falls under the Money Lending Business Act and the supervision of the Financial Services Agency. Outside Japan, the local issuers and acquirers that hold JCB licences are regulated by their own national authorities, and JCB's network activity is subject to payment system oversight where countries apply it to card schemes.

The brand is also affected by rules on interchange and data. In the European Union, schemes that operate through licensed issuers and acquirers fall within the interchange fee caps, and several Asian countries require domestic processing or local storage of card transaction data.

• JCB Global