Indian payment tech conquering Japan
The launch of the PayPay QR-code based cashless payment service at the end of 2018 by a joint venture consisting of SoftBank, Yahoo! Japan and One97 Communications as the owner of Paytm, India’s leading payment app, gives a glimpse into how the SoftBank Vision Fund is supposed to leverage investments across geographies.
The Vision Fund reportedly bought a 20% stake in Paytm for USD 1.4bn in May 2017. An investment by Warren Buffet’s Berkshire Hathaway in October 2018 is said to have pushed the One97’s valuation to USD 10bn. Paytm has the experience of having recruited almost 10 million offline merchants in India who accept settlements through Paytm by over 350 million customers.
This technology has now been brought to Japan, where the PayPay joint venture allows Paytm to tap into SoftBank’s mobile phone customer base and the 40 million users of Yahoo Japan’s electronic payment platform, Yahoo Wallet.
Since PayPay is a new brand and early Google searches returned “PayPal” rather than “PayPay”, the company launched a public relations and social media storm on December 4, coinciding with the announcement of 17,000 FamilyMart start all over Japan starting to accept the payment service. The “10 Billion Yen Giveaway Campaign” distributed all its funds within only 10 days. Currently, PayPay still offers a 0.5% cashback on all transactions for consumers, and will be free of transaction fees for merchants until September 2021, raising the temperature in the Japan cashless payment wars.
To further accelerate adoption, PayPay is partnering with Ant Financial to allow Alipay users to make payments with their app at PayPay-ready stores. Alibaba, of course, is one of Masayoshi Son’s earliest investments, and also an equity holder in Paytm.
For One97 Communications this is the second international market it launches Paytm in, after the online payment firm began its services in Canada in 2017.
We have previously reported on the state of cashless payments in Japan, the most cash-based society among developed countries:
Japan Cashless Payments: Miyazaki Bank
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