On July 6, 2026, Zentoshin Co., Ltd., a major credit card payment agency based in Osaka, filed for bankruptcy at the Osaka District Court and received an immediate order to begin bankruptcy proceedings. With total debts of approximately 125.9 billion yen, it is the largest bankruptcy of 2026. The collapse is having severe repercussions on both the food service industry and regional financial institutions.
Zentoshin’s Business Model
Founded in 1987 as the “Osaka Minami Food Business Cooperative” and incorporated in 2006, Zentoshin provided merchant acquisition services for credit card companies and offered early payment services by advancing merchant settlement funds. Restaurants particularly valued receiving payments as quickly as four days after card use. At its peak in 2018, Zentoshin served over 200,000 merchants, generating approximately 8.2 billion yen in revenue in fiscal 2020.
Path to Collapse
The COVID-19 pandemic dealt a severe blow as restaurant operating restrictions directly impacted Zentoshin’s business. Even after the pandemic subsided, the company struggled under past financial obligations. In January 2024, the company’s sales headquarters manager was arrested by the Tokyo Metropolitan Police for fraudulently registering merchants using false identities. The company itself was later referred to prosecutors for violating organized crime laws.
This compliance failure triggered contract reviews by international card brands and domestic credit companies, followed by a coordinated halt of funding from lenders. The resulting cash shortage made business continuation impossible.
Impact on Restaurants
The bankruptcy has frozen payment settlements for affiliated restaurants. Credit card terminals have stopped working, forcing many establishments to operate on a cash-only basis. Small individually-owned restaurants face severe cash flow pressures, with some facing existential threats.
Zentoshin had particularly deep penetration in nightlife establishments—high-end clubs in Ginza and Kitashinchi, Philippine pubs, and similar venues—serving as a last-resort payment provider for businesses that mainstream agencies would not touch. Finding alternative payment processing is proving difficult, suggesting prolonged disruption.
Ripple Effects on Regional Banks
Zentoshin’s outstanding loans include approximately 8 billion yen at Towa Bank, 5 billion yen at 33 Financial Group, and significant exposure at Yamaguchi Bank. On July 7, the Financial Services Agency launched an investigation into the impact on regional financial institutions. Concerns are mounting that loan recovery will be difficult for many lenders.
Outlook
Bankruptcy trustee Koji Inden has been appointed to oversee asset management and claims investigation. The Zentoshin case exposes the fragility of payment agency businesses with lax risk management and raises serious questions about regional banks’ lending practices.