Posted on : Sunday 8th March 2020 05:14 PM
Japanese mobile payment services combining with counterparts in South Korea and China as a method to lure local merchants who seek to tap revenue streams from an upsurge in tourists from those countries.
SoftBank Group unit PayPay will associate with KakaoPay, helping users of the South Korean app to pay at PayPay stores and restaurants with no signing up for the Japanese service. KakaoPay, a subsidiary of internet company Kakao, will update its app so it can read PayPay's QR code at merchants as early as October. Typically, QR payment codes are app-specific.
PayPay, that has similar arrangement with Alibaba Group Holding unit Alipay, has signed up more than 8 million people and about 700,000 merchants in Japan. KakaoPay boasts some 23 million users, primarily in South Korea.
The focus on travelers comes as Japan plans to host the 2020 Tokyo Olympic Games next summer. It also comes during a larger push by the Japanese government to encourage wireless payments in the country. Japan is standing lower than its Asian peers in the rate of cashless transactions, and is dashing to make itself friendlier to financial technology startups.
Japanese chat app operator Line designed changes to its mobile wallet platform in June in order for Line Pay merchants can take payments via Naver Pay, a service operated by South Korean parent company Naver. As early as this year, Line Pay stores will likewise start accommodating customers of WeChat Pay, offered by Chinese Internet powerhouse Tencent Holdings, as well as Line Pay users from Thailand, Taiwan and Indonesia.
Line also has an outside partnership with Payco, a platform by a unit of South Korean Internet company NHN, that allows customers of the two services to make payments in both countries. Payco aids more than 9 million customers with a network of 140,000 merchants.
Not only is Line Pay looking to broaden its reach, but it is also preparing to add more services, said Hisahiro Chofuku, Line Pay's chief operating officer. "We want to link overseas payment services through the Line Pay platform so that we can offer a cross-border remittance service," he said.
Mobile wallet services in Japan are waging a price war to increase new merchants and users, slashing fees and enhancing member rewards, in a packed market with some two dozen players. PayPay and Line hope deals with international platforms will help distinguish themselves and entice retailers looking to become more tourist friendly to join their networks.
International visitors spent an aggregate 4.51 trillion yen ($41.5 billion) in Japan in 2018, up 2% on the year, as stated in the Japan Tourism Agency. Vacationers from China and South Korea, the top two countries with references to visitors, were responsible for about half of that spending.
Source: NIKKEI ASIAN REVIEW