PayPay claims to have added up to 8 million customers in less than a year

, Internet, Retail, Tarjetas y Pagos Electrónicos, Telecomunicaciones

PayPay — a QR code-based payments service in Japan that enables payments from bank accounts — claims to have reached 8 million customers since launching in October 2018, according to PYMNTS. There are conflicting reports, however, with Nikkei Asian Review stating that PayPay has 6.66 million users and is accepted by 500,000 merchants, according to Yahoo Japan.The Japanese Government Is Pushing Digital PaymentsRegardless of which statistics are accurate, the service, which is a joint venture formed by Paytm, SoftBank, and Yahoo Japan, appears to have amassed a significant user base early on in its availability to Japan’s population of 126.8 million people.

Here’s what it means: PayPay’s used aggressive tactics to attract users and compete in Japan’s developing mobile payments industry — and they appear to be paying off.

  • The payment service has offered a bevy of benefits to both consumers and merchants to drive its popularity.When it launched, PayPay offered 500 yen ($4.63) in electronic money to consumers who downloaded the app and authenticated using a Japanese phone number, and it agreed to not charge merchants transaction fees until September 21. These efforts surely helped PayPay quickly build its adoption on both the consumer and merchant side, and it’s still offering promotions like 20% rebates on purchases for a limited time that could propel its adoption further.
  • Establishing itself so quickly should help PayPay seriously compete in Japan’s QR code payments market, which is estimatedto be worth 600 billion yen ($5.6 billion) in 2019 and is set to skyrocket. The industry’s value is increasing in part because Prime Minister Shinzo Abe wants 40% of consumer payments in the country to be cashless by 2025, which would be up significantly from 18% in 2015. This has spurred a number of payments firms to make new plays in the country, boosting the presence and acceptance of noncash payment methods.

The bigger picture: Tourists represent the next big opportunity for PayPay, and Japan’s mobile payments market on the whole, as the 2020 Olympics in Tokyo approach.
The 2020 Olympics promise to bring a number of tourists to Japan, which is why payments services like PayPay and Line Pay have partnered with services based in other countries. PayPay has teamed up with South Korea-based KakaoPay and Chinese mobile payments leader Alipay, while Line Pay is working with China-focused WeChat Pay.
Both firms’ deals enable Japanese merchants that accept their payments to also accept payments from their partners’ users. These deals could not only secure significant volume during the Olympics, but also build awareness of the payments services that they can leverage into greater success in the following years, making the 2020 Olympics a key event in the development of Japan’s mobile payments industry.

Source: Business Insider Intelligence

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