Why the Zentoshin Bankruptcy Hits Restaurants Hard

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What happens to stores when a payment processing company goes bankrupt? | Initial steps and cash flow management when sales proceeds are not received

This article provides a practical guide on what stores that have experienced non-payment should check in the first 24 hours and how to manage cash flow support.

※This article is based on a video released on July 7, 2026

Hello, this is Kane-san.

In this episode, I will discuss the bankruptcy of Zentoshin Co., Ltd., which provided early payment services for credit card sales.

At first glance, this might look like corporate news about a payment company going bankrupt. However, this is a much broader issue.

For restaurants, it could lead to a situation where sales have been made, but the money is not coming in. For investors, it highlights the recovery risk of social lending projects. And looking at society as a whole, while cashless payments have become convenient, the inherent danger of the structure where funds are temporarily held by payment processing companies is coming to light.

If you just brush it off by saying, "Cashless is convenient, right?", you might find there was a pitfall right under your feet. That is the kind of story this is. Moreover, that pitfall could have a major impact on businesses like the restaurants you love.

Zentoshin Co., Ltd. files for bankruptcy: The shock of approximately 125.9 billion yen in debt

On July 6, 2026, Zentoshin Co., Ltd. filed for bankruptcy with the Osaka District Court and received a decision to commence bankruptcy proceedings on the same day.

According to reports, the debt is approximately 125.9 billion yen. Based on information from Teikoku Databank, it is considered the largest bankruptcy of the year.

What Zentoshin provided was an early payment service for credit card sales for merchants such as restaurants.

Normally, with credit card payments, it takes time from when a sale is made until the money is actually deposited into the store's account. Therefore, Zentoshin provided a mechanism to deposit sales proceeds to merchants in advance, without waiting for the payment from the credit card companies.

For restaurants, this is a very helpful service.

There are daily purchases. There are labor costs. There is rent. There are utility costs. In other words, even if there are sales, if cash does not come in, the store cannot operate.

The fact that the company supporting this "getting money early" aspect has gone bankrupt is the major point here.

January 2024 document referral: The gravity of compliance issues

Regarding Zentoshin, serious compliance issues had been pointed out for some time.

As mentioned in the video, in January 2024, it was reported that they were suspected of allowing restaurants that would normally not pass credit card merchant screening to sign contracts under other people's names.

Some reports also mentioned issues related to stores prone to high-billing problems. (To put it bluntly, rip-off bars)

In that process, it is reported that an employee was arrested and the company itself was referred to prosecutors on suspicion of violating the Act on Punishment of Organized Crimes.

This is quite serious.

It is not simply a case of 'the business struggled and went bankrupt'; it means that significant questions were also raised regarding the very foundation of their business, such as their screening and contracting practices.

Of course, one must be cautious about how directly the bankruptcy itself is linked to the past referral to prosecutors. However, as a payment processing company that handles money, trust and management systems are the lifeblood of the business.

The fact that questions were raised about that is, I believe, a point that cannot be overlooked.

Supposed to 'respond sequentially' on July 6, but went bankrupt on that very day

Notices remained on the Zentoshin website until just before the bankruptcy.

The content stated that due to emergency system maintenance, merchant information could not be queried from July 2 to July 3, Reiwa 8.

Furthermore, regarding inquiries received during that period, the guidance provided was to contact them sequentially from Monday, July 6 onwards, or to contact them again on or after July 6.

However, the bankruptcy occurred on that very day, July 6.

For the merchants, this is a very harsh development.

They were told, 'We will respond from July 6 onwards,' but bankruptcy proceedings began on that day. Moreover, the notice regarding the bankruptcy trustee indicates that credit terminals and payment services will become unusable, and that sales proceeds will legally be treated as bankruptcy claims.

The term 'bankruptcy claim' that appears here is extremely important.

Simply put, it means that the money will not be paid in full immediately, but may be handled together with other creditors during the bankruptcy proceedings.

Even though there are sales, the money from those sales does not come in immediately. This is truly tough for restaurants. For a restaurant's cash flow, it is literally like having its blood flow stopped.

Direct hit to restaurant cash flow: Sales exist, but there is no money

The parties most likely to be affected by this Zentoshin bankruptcy are, as expected, merchants such as restaurants.

In restaurants, cashless payments have become quite standard.

There are various payment methods, including not just cash, but credit cards, QR code payments like PayPay, and electronic money. It is convenient for customers, and restaurants have no choice but to support them.

However, there is a pitfall here.

With cash, money goes directly from the customer to the store. However, with cashless payments,it first passes through a payment processing company or similar entity.

In other words,

• the customer pays by card

• money flows to the payment processing company

• from there, it is deposited into the store's account at a later date

is the flow.

During the time between this and the 'deposit into the store's account at a later date,' several days to several weeks' worth of sales may remain held by the payment processing company.

This is the scary part.

For restaurants, while profit margins are certainly important, cash flow is even more important. For some stores, just having several weeks of deposits stopped can affect payments for supplies, labor costs, and rent.

There are sales, but no cash.

This is a state where, although sales are recorded on the books, the actual wallet is nearly empty.Even though the numbers look healthy, the business itself is suffocating. It is quite a frightening scenario.

Cashless payment is social infrastructure, which is precisely why there is a dependency risk

What this issue has brought to light is the reality that cashless payment has already become social infrastructure.

From the customer's perspective, a store that does not accept cards is inconvenient. If QR code payment is not available, they think, 'Oh, do I need cash?'

On the other hand, from the store's perspective, it is not easy to suddenly switch payment terminals or payment processing companies.

You need to find a new payment processing company. There is also the matter of switching terminals. There is a screening process. The deposit cycle also changes.

Moreover, if an incident like this occurs, there is a possibility that the screening by credit card companies and payment processing companies will become stricter. If that happens, it will become a new burden for small and medium-sized restaurants.

Cashless payment is convenient. There is no doubt about that.

However, that convenience is supported by the systems of payment processing companies and credit card companies. As long as you are dependent on them, the impact when one of them stops is quite significant.

I believe the Zentoshin bankruptcy is an event that clearly demonstrated that dependency risk.

A Realistic Defensive Measure: The Business Safety Mutual Aid

In cases like this, where a business partner goes bankrupt and collecting accounts receivable becomes difficult, the Business Safety Mutual Aid becomes important.

Formally, it is the Small and Medium Enterprise Bankruptcy Prevention Mutual Aid System.

A wide range of businesses, including sole proprietors, small and medium-sized enterprises, and cooperatives, can join.

This is a system designed to prevent chain bankruptcies when a business partner goes bankrupt. As mentioned in the video, under the system, it is possible to borrow up to 10 times the installment amount, with a maximum of 80 million yen, without collateral or guarantors.

The full amount can be deducted as an expense, and it is not a sunk cost; 80% to 100% of the money is returned depending on the duration of enrollment. (The full amount is returned after 40 months of enrollment.)

Of course, this does not mean that anyone can borrow money at any time. Conditions vary depending on enrollment status, total installment amount, and the amount of accounts receivable.

However, in a situation like this, whether you know about it and how quickly you act makes a big difference.

Cash flow management is a race against time.

Businesses that might be eligible need to check with their tax accountants, financial institutions, or the Organization for Small & Medium Enterprises and Regional Innovation, JAPAN.

This is truly important.

The initial response differs between those who knew the system existed and those who panicked without knowing. To protect your business, it is important to be aware of such systems during normal times.

Some stores received payments, but the overall picture is not yet clear

On the other hand, it does not seem that all stores using Zentoshin are suffering the same damage.

In the video, I also introduced reports from those who used Zentoshin but ended up receiving their payments.

While there is a possibility that payments for July 1st to 6th may become bankruptcy claims, it seems there are cases where no damage occurred depending on the timing of the deposit.

There is also a view that if the comprehensive transfer process was already underway, it might have been deposited as is, provided no one stopped it after the bankruptcy.

However, the overall picture is not yet clear here.

Which period's sales will be covered? Which stores still have unpaid balances? How much can be recovered during the bankruptcy proceedings?

We need to keep an eye on future information regarding these points.

At this stage, the important thing is not to be overly optimistic by thinking, "Some people have received payments, so it's fine." Conversely, it is also too early to conclude that "everything is lost."

The situation may differ for each store. That is precisely why the businesses involved need to check their outstanding payment amounts, target periods, contract details, and future payment methods one by one.

Potential Ripple Effects on Nightlife and Beauty Salons: The Spread of Zentoshin Terminals

There are reports that Zentoshin terminals were used not only by restaurants but also by so-called "night leisure" businesses like cabaret clubs, as well as beauty salons and motorcycle dealerships.

There are also reports that "Zentoshin" was written on credit card receipts.

What is important here is that Zentoshin was not just a service for a specific segment of restaurants, but may have been used across a fairly wide range of businesses.

While it had the flexibility to allow contracts for stores with strict credit requirements or those that struggle to pass standard merchant screening, there are also claims that its fees were high.

In a sense, it could be said that it played a role in supporting stores that had difficulty accessing standard payment networks.

However, precisely because that role was significant, the impact when the company stops operating is also significant.

"I used it because it was convenient."
"There were few other options."
"It helped because payments were made quickly."

Even if these operational circumstances existed, if you are heavily dependent on that service, the blow when it suddenly stops becomes quite severe.

Alterna Bank and Bankers Projects: Risks for Investors

The Zentoshin bankruptcy is not just a problem for the stores.

It could also have a major impact on people who invested in projects related to Zentoshin. In the video, I also touched upon the Zentoshin projects of Alterna Bank and Bankers.

In bankruptcy proceedings, a bankruptcy trustee liquidates the remaining assets, from which trustee fees, taxes, social insurance premiums, and unpaid employee wages are paid. After that, any remaining money is distributed to creditors.

In other words, how much investors can recover depends heavily on the nature of the remaining assets and their priority.

What I emphasized particularly in the video is the danger of unsecured projects.

If there is collateral, there is a possibility of recovering a certain amount of debt by disposing of it. However, in the case of unsecured loans, it depends on how much of a dividend is available during the bankruptcy proceedings.

If you invest looking only at the yield, it is truly difficult in situations like this.

In social lending, you need to look at at least the following three points.

• Is there collateral?

• Can the loan be recovered through the sale of collateral?

• Will there even be a buyer for that collateral in the first place?

The third point is especially important.

Even if the appraised value of the collateral is high, it is meaningless if it cannot actually be sold. Even if it is valued at 100 million yen, it cannot serve as a source of recovery if there is no buyer.

Do not be reassured just because it says "collateral included." What is being used as collateral? Can that collateral really be sold? Who will buy it?

Unless you look this far, the risks of social lending will not be visible.

Switching to cheaper payment terminals and Zentoshin's plight

As a voice that appears to be from a former insider, I also introduced the view that the background to Zentoshin's poor performance may have been the high rate of payment processing fees.

In recent years, Square and Rakuten have increased the number of payment terminals with relatively low fees.

As a result, more stores are switching from payment services with high fees to cheaper services.

While Zentoshin offered flexibility in contracts, there were also voices saying that their fees were high.

In other words, although they had a presence by taking in stores that had difficulty using standard payment services, it is possible that they gradually became more difficult to sustain due to the spread of low-cost payment terminals, compliance issues, and the impact on restaurants after COVID-19.

Of course, the cause of the bankruptcy cannot be attributed to a single factor.

However, the structure is becoming clear.

Cashless payments are advancing. Low-cost payment terminals are increasing. The eyes of screening and management are also becoming stricter. In this environment, how sustainable was the business model of early payment processing?

I believe this is an area that should be further examined in the future.

The "flip side of convenience" revealed by the Zentoshin bankruptcy

What was revealed by this Zentoshin bankruptcy is the flip side of the convenience of a cashless society.

You can pay without carrying cash. It makes checkout smoother for shops. It also supports inbound tourism. These benefits are certainly real.

However, behind the scenes, customer money does not reach the shop immediately. It often passes through a payment processing company and may be held there for a certain period.

When that company stops operating, sales revenue doesn't come in. Terminals stop working. You have to find a new payment company. In some cases, it leads to a cash flow crisis.

This is not an argument against cashless payments themselves.

Rather, it is about the fact that because cashless payments have become social infrastructure, we must properly understand the risks of that system.

Convenience always has a flip side. Behind card payments, there are merchant agreements, screening, payment cycles, transaction fees, and the credit risk of the payment processing company.

Usually, these are invisible. But when it stops in the form of a bankruptcy, it all comes to the surface at once.

I believe this incident serves as an important lesson not only for restaurants but for businesses in general and for investors as well.

Summary: The Zentoshin Bankruptcy Does Not End with 'Bankruptcy News'

The key points of this incident are as follows:

• Zentoshin Co., Ltd. filed for bankruptcy at the Osaka District Court on July 6, 2026, with liabilities estimated at approximately 125.9 billion yen.

• Zentoshin provided early payment processing services for card sales to businesses such as restaurants.

• There is a possibility that sales revenue will be treated as bankruptcy claims, which may affect the cash flow of member stores.

• It is important to be aware of defensive measures for business cash flow, such as the Management Safety Mutual Aid system.

• In social lending investments, it is necessary to look not only at the yield but also at the presence of collateral and its liquidity.

The Zentoshin bankruptcy is not just the failure of a single company.

In an era where cashless payment has become social infrastructure, we must consider where sales money goes and when it reaches the shop. If a company in the middle of that process collapses, who is affected and to what extent?

This is an event that makes us think about that.

The more convenient a system is, the greater the impact when it stops. That is precisely why understanding the system is a form of defense.

If new information becomes available in the future, I would like to organize it as a follow-up report.

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