Paytm partners with Yahoo, SoftBank to launch PayPay wallet in Japan
Indian wallet provider Paytm has entered the Japanese market in a joint venture with SoftBank Group and Yahoo Japan.
The venture’s new service, called PayPay, allows consumers to store funds in a mobile wallet to use for purchases, both online and in-store. SoftBank had signaled in July that it was planning to introduce the PayPay mobile payment app this fall in partnership with Yahoo Japan’s mobile wallet and would leverage the QR code technology from Paytm.
In a move to accelerate adoption by merchants, Paytm stated that it would not be charging an interchange fee for QR code transactions over the next three years, ending September 30, 2021, according to in a company blog post. There is also a consumer incentive of JPY 500 (about US$4.50) being offered to download the payment app and register it with a valid Japanese mobile number.
Softbank is a major shareholder in Yahoo Japan, having increased its investment in 2017, giving it a 48 percent stake in the company. Additionally, Paytm raised $1.4 billion from Softbank in 2017, valuing Paytm and its parent, One97, at $7 billion at the time of the transaction.
Separately, Warren Buffet’s company, Berkshire Hathaway, also invested in One97 this summer. Berkshire Hathaway acquired an equity stake in August to the tune of INR 25 billion (about US$340 million), which raised One97’s valuation to US$ 10 billion.
Currently there is a mad dash occuring in Japan as banks and fintechs dive into electronic payments, seeking to change consumer purchasing habits.
A key driver behind the electronic payment initiative has been Japan’s Ministry of Economy, Trade and Industry (METI), which is trying to wean the country from its heavy dependence on cash transactions for daily life.
Last year, Paytm entered Canada with the launch of a mobile bill and tax payment service. The approach taken for the Canadian market was different than its offering in India, due to the variances in the two markets. In India, there is a large unbanked population and very few consumers own credit cards. In contrast, Canadians are mostly banked and have the second-highest per-capita use of credit cards in the world, according to a report published by Payments Canada, which operates payments clearing and settlement on behalf of Canada’s central bank.