SoftBank Group plans to announce within days that it will start a mobile digital payments service in Japan by the end of 2018 as billionaire founder Masayoshi Son seeks to expand in the sector, people familiar with the matter said.
The service, a collaboration with Indian startup Paytm, will make extensive use of artificial intelligence for mobile payments and other financial services, the people said, asking to not be identified as the plans are private. An announcement is imminent, they said. Dozens of Paytm employees are working in Tokyo on getting the service up and running, one of the people said.
Son, who created the world’s largest technology investment fund, is moving into a crowded field as local banks and technology companies stake their claims. Line, Japan’s biggest instant-messaging service, and flea-market app Mercari Inc. have both been pushing into digital payments. Internationally, the sector has yet to see any global leader emerge. Paypal Holdings, Ant Financial, Tencent Holdingsand Paytm have all become huge, but in limited geographies, while attempts by Apple and Samsung Electronics haven’t gained significant market share.
SoftBank wants the Japanese program to give the company a launchpad to take the service global as Son seeks to capture a share of the consumer trend away from using cash, the people said. The Tokyo-based company, which owns the nation’s No. 3 wireless carrier, could expand the payments system to add financial services such as lending, insurance and other services, the people said.
Recent regulatory changes in Japan that will come into effect in the next two years are expected to accelerate a shift to digital payments, already prompting huge interest from a variety of players including banks.
Son, through the near $100 billion SoftBank Vision Fund and SoftBank itself, has been involved in hundreds of deals and has become the biggest investor in ride-hailing globally through stakes in Uber Technologies, Singapore-based Grab, China’s Didi Chuxing and India’s Ola.
One97 Communications, which owns the Paytm brand, raised $1.4 billion from SoftBank last year in exchange for a 20 percent stake. The startup founded by Vijay Shekhar Sharma has seen its usage surge since the Indian government banned some currency denominations in November 2016 to tackle corruption.