Noida-based digital payments company Paytm (One97 Communications), in collaboration with SoftBank and Yahoo! Japan, has announced a joint venture PayPay Corporation, which is a smartphone-based settlement service in Japan. The announcement has come now even though the joint venture was created in June this year.
With the help of PayPay services, users can transfer money from a bank account to their PayPay wallet as well as use it to make payments. The services are based on Paytm’s QR technology. Inc42 quoted Ichiro Nakayama, president and representative director CEO, PayPay Corporation, “Paytm is the leader in smart electronic payment services in India and has achieved great success. It is a great strength to introduce Paytm’s high technology and solution to PayPay, and I am confident that it will greatly contribute to the expansion of users in Japan.”
According to numbers from Inc42 in an earlier report, SoftBank and Yahoo! Wallet’s customer base reached a whopping 40 million accounts as of June 2018. After this joint venture, the PayPay wallet services will be incorporated with the Yahoo! Japan ID of existing users, offering Yahoo! Wallet customers the option of using PayPay services, while remaining in the Yahoo! Japan’s smartphone application.
As an initial offer, any user who downloads the app and authenticates it with a valid Japanese mobile number will receive electronic money equivalent to 500 Yen from PayPay. Moreover, till the end of September 2021, PayPay will not charge any fee for ‘user scan’ type settlement for three years from sellers and establishments.
Inc42 quoted Madhur Deora, CFO and senior vice-president of Paytm, “PayPay was developed with teams from three different countries working together. It is a true testimony for us and our industry-leading solutions that can be easily ported to suit the needs of any country or market.”
With an aim of raising the Japanese cashless payment ratio to 40% by 2025, the government of Japan is eager to see a reduction in dependence on cash transactions in the country and is accordingly taking steps. Japan has a long-term goal of reaching a cashless payment ratio of 80%.
An EV Survey reveals that fintech users in Japan are ranking the lowest in the world right now. A Bloomberg report from April 2018 shows that the Financial Services Agency anticipates that most lenders in Japan will have open APIs in place by 2020. Japan’s current digital payment market is said to be worth USD 50 billion. Many companies in the country are working on payments platforms that make use of tech like QR codes and blockchain.
While Paytm boasts a current user base of over 350 million, exceeding 9.5 million offline merchants in India, it went international with its services for the first time in March 2017 in Canada. Making its foray into Japan, Paytm will face competition from the likes of Microsoft, which has established wallet services in Japan since April 2016, messaging app provider Line, which started Line Pay, and NTT Docomo’s QR-based payment service.