The two companies are planning to launch a joint venture called “PayPal Japan” which will become a digital payments business driving the future of commerce in Japan (view press release). By combining PayPal’s online and mobile payment solutions with SOFTBANK Group’s local market knowledge and distribution network, the venture will aim to provide the foremost digital wallet for online, offline and mobile transactions connecting consumers with merchants and expanding the use of digital payment solutions in the Japanese market. PayPal and SOFTBANK will both invest USD12.5 million in the new venture and will each designate three directors. Mr Hiroaki Kitano, SVP and director of SOFTBANK MOBILE Corp., is expected to serve as CEO. The two parties are also rolling out PayPal Here in the country making Japan the fifth country to receive the mobile payment solution after the US, Canada, Hong Kong and Australia.
The Japanese retail commerce market was worth USD1.7 trillion in 2011 and supported the growth of 4.7 million small businesses, which account for 99% of all businesses and 70% of employment in the country. 31 million smartphones are expected to be shipped to the country by the end of this year making it one of the most advanced mobile nations in the world but one in which many transactions are still cash based.