Zentoshi Becomes 2026’s Biggest Bankruptcy

Signs warning customers that credit cards could not be used were already appearing at shops in a Tokyo shopping district on July 8. Many were handwritten and posted near entrances, with notices such as "credit cards unavailable" and "cash payments only."

People on the street expressed concern. "It makes me panic. I basically use credit cards," one person said. Another said, "I’m a credit card person, so this won’t work for me. It’s a problem."

Zentoshi, which had contracts with restaurants and other businesses nationwide to handle credit card payment processing, was found to have received a court decision to begin bankruptcy proceedings.

The impact spread quickly across restaurants nationwide. On the night of July 7, at creative izakaya Balmichi in Tokyo’s Shibuya district, a male customer was seen carefully counting cash at the register. He said it had been a while since he last paid in cash. "It’s probably been about a month. It feels rare. It’s like, ‘It’s been a while,’" he said.

At Balmichi, which had a contract with Zentoshi, credit card terminals installed at the register began displaying an error message from July 6. The restaurant has since been limited to cash payments.

One customer said, "I didn’t bring cash today, so I’m in trouble. My friend is going to withdraw money now. It’s a huge inconvenience."

The sudden disruption has left not only customers but also restaurant owners confused.

"Credit cards suddenly stopped working from July 6," said Shingo Kimura, owner of Balmichi. "Recently, many customers pay by credit card, so it’s about 80% cards and 20% cash."

Zentoshi had earned fee revenue by advancing sales proceeds to merchants when customers paid by credit card, allowing stores to receive money earlier than they normally would from card companies.

With Zentoshi’s bankruptcy, however, restaurants may have difficulty recovering sales proceeds that have not yet been deposited.

"The next closing date is July 15, and the money is supposed to come in on July 20," Kimura said. "In terms of the amount, it’s probably close to seven figures." Asked whether that meant just under 1 million yen, he said, "Yes, that’s about right."

As of 2018, Zentoshi had about 200,000 member stores. Some restaurant operators say several million yen remains unpaid across seven outlets in their group.

"It covers five days, from July 1 to July 5," said Noboru Yamazaki, business division manager at Bar Company. "I think it really amounts to several million yen. I’ve been in the restaurant business for a long time, but this is the first time something like this has happened, and I’m extremely shocked."

As cashless payments become more common, people on the street were asked how much cash they had in their wallets. Many said they were carrying only a few thousand yen. "Four thousand yen. If I go out to eat, I just use a credit card," one person said. Others said, "I have 9,000 yen," "I had 5,000 yen today, which is a lot for me," and "I carry cash, but I mostly pay by card."

The question now is why Zentoshi collapsed with liabilities of about 125.9 billion yen, making it the largest bankruptcy in Japan so far in 2026, despite the growing use of cashless payments.

Food journalist Rikiya Yamaji pointed to an illegal contract issue involving Zentoshi in 2024. "That caused the company itself to lose credibility," he said.

Two years ago, former employees of Zentoshi were arrested in connection with allegations that they illegally installed payment terminals at restaurants that had been exposed over so-called rip-off practices. The company’s cash flow reportedly worsened afterward due to concerns over its credibility.

"Zentoshi’s collapse has sent a major shock through the industry," Yamaji said. "Restaurants operate on thin margins and high volume, so I think this is a matter of survival."

Source: FNN