Precast reinforced concrete (RC) shear wall structures (PRCSWS) are widely adopted by high‐rise buildings owing to their attractive advantages such as high construction quality and seismic resistance. A novel vertical joint for PRCSWS was proposed, featured by the indirect lap between connection cages and vertical distributed bars of the wall panel. The feasibility of this joint was verified by pseudo‐static experiments on precast shear wall specimens with different joint designs and a referential cast‐in‐place (CIP) specimen. To gain more insights into the failure mechanism of the PRCSWS with different joint designs, non‐linear finite element (FE) models were established and analyzed for the numerical study. The simulation showed good agreement with the experimental result regarding the load‐drift curves, cracking patterns, and failure modes, exhibiting a flexural‐shear failure with corner concrete crushing. The investigation into the failure patterns of four specimens indicated that anchorage deterioration of interfaces inside the joints was induced by cyclic tension, leading to both reductions in ductility and energy dissipation. This effect was more obvious when the connection cages (a design parameter) were less and more concentrated. The parametric study revealed that increasing the anchorage length of connection cage in wall panel and additional confinement reinforcements surrounding the reserved ducts could reduce the relative slip on the interfaces and enhance the anchorage of connection cages, which could further improve the seismic performance of PRCSWS.