Japan’s blossoming digital payments industry is being eyed by one of the world’s largest tech companies.
A new online and mobile payment app called PayPay will be launched in Japan by SoftBank in partnership with Yahoo Japan. The app is set to be launched fall, the companies announced on Friday.
The market segment that the companies are entering into already have some of the largest global players including Apple, Samsung Alibaba and Japan’s top messaging app Line and the new app from SoftBank and Yahoo – PayPay, would rival similar payment apps that are operated by these players in Japan.
There will also be a collaboration between SoftBank and Yahoo with India’s biggest online payments company Paytm.
A large section of Japanese consumers and customers still prefer and make use of cash for transactions despite the presence and proliferation of online and mobile payments and with state of the art and advanced banking systems. only about 20 per cent of the total transactions that are done in Japan is made using credit cards, electronic payments and other cashless systems.
There is an intent now of the government there to change that trend and had announced earlier this year that it intends to double the amount of cashless transactions ion the country by 2025. And before the 2020 Olympics games in Tokyo, the government is also attempting to push more store owners in the country to adopt cashless payments.
That transition can be helped by Paytm. This startup is the market leader in cashless digital transactions and payments in India where analysts from Credit Suisse expects growth of digital payments to touch a total value of $1 trillion within the next five years form the current value of $200 billion.
SoftBank also has a sizable investment in Paytm. Paytme has gpot a sizable investment from SoftBank through its $100 billion fund aimed for investments in tech companies and startups – the SoftBank Vision Fund. On the other hand, SoftBank is also a major investor in Chinese tech giant Alibaba which in turn owns a sizable portion of the shares Paytm.
PayPay will make use of the data base of mobile phone customers of SoftBank as well as tap into the more than 40 million users of Yahoo Wallet – the electronic payment app of Yahoo Japan.
There is a rising trend among consumers to slowly and gradually move away from cash and accept and adopt the digital payment platforms for transaction in a number of Asian countries such as China and India. in 2017, the volume of digital payments in China was over $32 trillion which was almost a 30 per cent increase in the number compared to the figures from a year earlier, says data from the People’s Bank of China.
The method of using QT codes as is popular in China would be emulated by PayPay. In this method, smartphones are used by consumers for transactions and payments by scanning of images comprising of a number of black and white squares.
(Adopted from Money.CNN.com)