SMBC invests JPY 10bn in Infcurion, combining to create leading digital payments platform
Sumitomo Mitsui Card, Sumitomo Mitsui Banking Corporation, and Infcurion have concluded a capital and business alliance agreement for collaboration in the business payment and financial services sector.
Through this alliance, Infcurion will play a key role in the “SMBC Group’s Cashless Payment Strategy” primarily promoted by Sumitomo Mitsui Card. It aims to build and provide Japan’s №1 solution platform that transforms businesses with cutting-edge solutions centered on payments, contributing to the evolution and expansion of the payment market. SMBC is participating in this alliance to expand the areas of collaboration between both group companies.
SMBC Group will become the allottee of new shares issued through a third-party allotment by Infcurion and will acquire shares from some existing shareholders of Infcurion, excluding its management. As a result, Infcurion will become an equity-method affiliate of Sumitomo Mitsui Financial Group. However, Infcurion will maintain its independence with a capital structure and management system centered on its management team, and will continue to pursue growth in its existing businesses. Infcurion aims to accelerate business growth by balancing the pursuit of continuous growth in existing businesses with this alliance, and targets an early public listing.
This alliance will be implemented within the scope of applicable laws and regulations, and after completing any necessary procedures based on such laws and regulations.
1. Background and Purpose of the Alliance
With the support of the government’s “Cashless Vision” and changes in lifestyle and work styles due to the COVID-19 pandemic, the cashless payment ratio among domestic consumers has been rising year by year. As a result, the cashless payment market has been expanding, and constant changes have continued due to technological advancements, new entrants from various players, and diversification of business and user needs.
For businesses, with the widespread adoption of smartphones and the expansion of payment methods, consumer behavior has shifted to a mobile-centric lifestyle. This has led to the emergence of needs to provide payment, services, and marketing in a one-stop manner through their own apps.
In recent years, with the enforcement of legal reforms related to accounting and bookkeeping operations, such as the invoice system and the revised Electronic Books Preservation Act, the movement towards digitalization in business-to-business transactions has accelerated. There is also a growing need to promote cashless payments in business-to-business transactions to reduce the burden of labor shortages and inefficiencies, as well as to enable real-time visualization of cash flow and accumulate transaction data for high-precision marketing and creation of new business value.
Under these circumstances, SMBC Group has put forth the “SMBC Group’s Cashless Payment Strategy,” mobilizing the group’s collective strength and expanding collaboration with companies outside the group to upgrade various services provided to businesses.
Major examples of corporate services include proposing efficiency improvements in expense settlement through various corporate cards, and providing products and services that are ahead of the times, such as “stera” for businesses (merchants).
On the other hand, Infcurion, as a leading company in Embedded Finance, has been working on developing numerous payment-related products that combine payment, finance, and technology, and preparing a social acceptance system to realize advanced payment infrastructure such as open APIs.
A major example is “Xard,” a next-generation card issuance platform that can be embedded in various businesses and services. The number of corporate cards issued through “Xard” has reached 1.5 million in the three years since the product was launched. In addition, Infcurion has been providing next-generation FinTech platforms for non-financial businesses to offer financial services in combination with their own services, such as the invoice payment platform “Winvoice” and the digital wallet platform “Wallet Station” for businesses and financial institutions.
Through this alliance, by combining SMBC Group’s diverse solutions with Infcurion’s advanced and highly convenient products, the partners will build and provide a solution platform that comprehensively supports the digital transformation of businesses, starting with payments. the partners aim to contribute to the evolution and expansion of the payment market as Japan’s №1 digital partner supporting the growth and management reform of businesses.
Furthermore, SMBC Group believes that the source of Infcurion’s competitiveness lies in its entrepreneurial corporate culture, experience in solving various payment issues through collaboration with various businesses, and excellent consultants and engineers. Infcurion plans to strengthen its product development system, including personnel, by utilizing the newly acquired funds.
2. Direction of Initiatives by Business Area
SMBC Group and Infcurion will collaborate in providing solutions for B2B and B2C businesses, but will also consider collaboration in other areas according to customer needs.
(1) Payment and Financial Services for B2B Businesses
Based on the corporate card services held by Sumitomo Mitsui Card and Infcurion, the partners will combine knowledge and expertise to develop and provide new corporate cards with industry-leading functionality and convenience, such as instant issuance of corporate credit cards and mobile payments.
In addition, the partners will work on developing new partnership card models that leverage the functional expandability of Infcurion’s next-generation card issuance platform “Xard” and SMBC Group’s credit management know-how, and seamlessly integrate and provide the invoice payment platform “Winvoice” with corporate cards. By connecting the products and know-how of both group companies, the partners will work on developing even more convenient products.
Furthermore, by connecting financial and non-financial services with Infcurion’s consulting knowledge and API linkage technology, centered on SMBC Group’s comprehensive financial services, the partners will build and provide a platform that supports corporate management comprehensively and digitally/remotely, such as providing one-stop services for fund management from invoice exchange to payment and collection, beyond the boundaries of finance.
(2) Payment and Financial Services for B2C Businesses
The partners will consider developing a new platform that responds to the business characteristics and business models of companies by combining Sumitomo Mitsui Card’s rich payment solutions with various functions such as the digital wallet infrastructure and original Pay of Infcurion’s “Wallet Station,” and deploying them in the most optimal combination.
This will improve customer convenience for businesses, reduce the burden of cash register operations by promoting cashless payments, and improve marketing precision through the utilization of payment data.
In addition, leveraging the rich financial solutions of both group companies and Infcurion’s consulting knowledge, the partners will support businesses’ cashless strategies in an end-to-end manner, from planning financial strategies to solving issues such as integrating multiple customer IDs, developing necessary app functions, and operations.
In addition to the above two initiatives, to strengthen the solution provision capability in the payment and financial services area for businesses, the partners will strive to provide solutions that create new value and transform their customers’ businesses by combining the products of both group companies with SMBC Group’s customer base.
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