Digital Garage fully launches “AppPay,” the first service for third-party payment in Japan

Digital Garage (DG) has started full-scale operation of “AppPay,” the first online marketplace service in Japan that allows users to purchase digital content for various apps outside of the respective platform’s app store, e.g. Apple App Store or Google Play Store.

This service enables app operators to easily build a function for third-party payment within “AppPay” and significantly reduce the burden of payment fees to 5%. App users will have new payment options and new benefits.

Background

App stores play an important role in acquiring and protecting users through high-quality app management, security, and customer attraction. At the same time, there is growing discussion that the fact that users’ digital content purchases are effectively restricted within apps makes it difficult for competition to arise among businesses, including digital platforms. This situation is leading to pressure on the revenue of app developers and hindering service innovation.

In response to this, lawsuits between digital platforms and app developers have arisen in the United States, and in the EU, laws ensuring a fair and open digital market have been enacted, indicating changes in the global social situation. Also, Japan has recently passed the “Bill for the Act on Promotion of Competition for Specified Smartphone Software” at a plenary session of the House of Representatives, and it is expected to be enacted in the current session of Parliament, which is a significant moment of progress toward the healthy development of market competition. Once enacted, the law is expected to become effective by the end of 2025.

As a company engaged in the payment and marketing business, DG was quick to recognize this change in social situation and has developed “AppPay” using one of the largest comprehensive payment platforms in Japan, provided by DG Financial Technology, and began its initial rollout to some game companies in the summer of 2023.

Future roadmap

“AppPay” will not stay as an online marketplace service but will also support app providers in building their own stores and supporting the international expansion of Japan’s leading app providers. Furthermore, DG will expand their target areas beyond games to include comics and video streaming, while also enhancing media functions to generate user traffic.

Moreover, DG Group has established the group strategy “DG FinTech Shift,” which integrates payments, data, and technology to contribute to the business growth of a wide range of companies amidst significant changes in social and industrial structures. This service is part of that group strategy.

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