Homegrown digital payments player Paytm is being taken to Japan and this is being done by SoftBank, which holds around 20% stake in Paytm. According to a Bloomberg report, a large team from Paytm is currently based out of Tokyo working out the nitty-gritties of the digital payments platform that might go live by the end of this year.
The service is expected to incorporate artificial intelligence for mobile payments and other financial services.
One underlying reason for this move by SoftBank could be the changes already incorporated in Japanâ€™s financial sector regulations which envisages a quantum shift to digital payments within the next 2 years. But SoftBank and its Founder Masayoshi Son may have to contend with some serious competition within Japan and elsewhere.
In their home country, there is Line Corp and Mercari Inc. Line Corp runs an instant messaging service similar to WhatsApp and has shown keen interest in moving in to the digital payments space to exploit the user base it has created already. The other, Mercari, has an app that peddles stuff from the flea-market.
SoftBank has made investments in many countries besides India and is now hoping that its digital payments business can be pushed in all these countries. There is no single startup in the digital payments space with large global footprints. The large players are PayPal, Tencent of China and Ant Financial, an arm of the Alibaba Group. Apple Pay and Samsung Pay, both of which could have staked claim to be truly international with their smartphones being sold and used in practically every country in the world, have not been able to make a huge dent in the market.
SoftBank is also in the wireless communications business and Japan and is ranked third. How much of an assistance that could be in rolling out the digital wallet business is still to be seen. Once launched, the company will try and add other services such as insurance and loans on the same platform.
Paytm has made significant progress in the Indian market by gaining a huge base of regular users of its QR code scanner payment system and other digital payments facilities. It has now received a licence to run a payments bank and is constantly looking at expanding its presence.