@Isaac I live in Kanto, a district that contains five prefectures. Tokyo and Yokohama are in this area.
During the past 5 years, I've never seen a shop, no matter how small it is, that doesn't accept digital payments. It's mostly because counting money at check-out wastes a lot of time. In each store, on entrance you will see something like this.
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This is the available digital money that the shop accepts. Of course depending on shop these are different. But at least they offer more than 10 brands. The only thing that I can think of is, as I explained we have a specific way of paying digital money. And there's a good chance your friends just wanted to insert the card and think it's finished. This doesn't work here. I think it's why the shop has asked for cash.
Can you ask them which city and possibly if they remember which shop refused their card?
Ask them haven't they seen something like this
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This may help. We actually have a war here.
Cashless payment methods are currently one of the biggest topics in Japan and new contenders into the market are appearing one after another.
plusalphadigital.com
From Above link :