BANGALORE, INDIA – SoftBank Group Corp. 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 rush to stake their claims. Line Corp., Japan’s biggest instant-messaging service, and flea-market app Mercari Inc. have both been moving into digital payments. Internationally, the sector has yet to see a global leader emerge. PayPal Holdings Inc., Ant Financial, Tencent Holdings Ltd. and Paytm have all become major players but in limited geographical areas, while attempts by Apple Inc. and Samsung Electronics Co. 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 offerings such as lending, insurance and other services, the people said.
Hiroe Kotera, a spokeswoman for SoftBank, declined to comment. Paytm didn’t respond to requests by email for comment.
Recent regulatory changes in Japan that will come into effect within the next two years are expected to accelerate a shift to digital payments, which is 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 also become the biggest investor in ride-hailing globally through stakes in Uber Technologies Inc., Singapore-based Grab, China’s Didi Chuxing and India’s Ola.
One97 Communications Ltd, 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.