To expand Japan's e-payments market, Japanese telecoms operator Softbank Corp. said on Wednesday it will form a joint venture with PayPal, a transaction unit of eBay (News - Alert). The project will target users of Apple’s iPhones, according to Reuters.
The International multimedia news agency reported that PayPal will separately invest one billion yen (US $12.54 million) with Softbank (News - Alert), which competes with KDDI Corp. in supplying the popular smartphones in Japan.
This information was given by Softbank president Masayoshi Son to reporters in a news conference, the source reported.
According to Bloomberg (News - Alert) Businessweek, the new JV company will be called PayPal Japan and offer a service that allows businesses to accept debit-card, credit-card and PayPal payments through smartphones. The target market for the new venture is Japan’s 4.7 million small businesses, which can use the service to avoid setting up merchant accounts to collect card payments.
Based on statements from the Tokyo press conference, the Businessweek report suggests the venture may eventually sell shares to the public. “That’s the way both companies can benefit from the business if it succeeds, instead of absorbing profits from the venture,” Son told reporters.
PayPal and Softbank said the Japanese retail commerce market, where many transactions are still cash-based, was worth 134 trillion yen in 2011. The service’s card reader will sell for 1,200 yen, and an application for Apple’s iPhone (News - Alert) are available for “select merchants.” It will be available to others “in the next several weeks,” along with a version for Google’s Android (News - Alert) operating system, the companies said in a joint statement recited by Businessweek reporter Mariko Yasu.
PayPal said it has 110 million active accounts in 190 markets and 25 currencies, while Softbank indicated that it has 29 million mobile subscribers.
Edited by Braden Becker