Business / Financial Markets

MUFG Bank to launch smartphone payment service

JIJI

MUFG Bank will set up a joint company with human resources services provider Recruit Holdings Co. to launch a smartphone-based cashless payment service, it was learned Wednesday.

The core banking arm of Mitsubishi UFJ Financial Group Inc. will seek to utilize Recruit’s client base of eateries, hotels and beauty salons to amass participating stores and users for the service, in a market currently dominated by technology companies.

The two companies concluded a contract in October to give Recruit a 51 percent stake in the new joint company, with the remaining 49 percent held by MUFG Bank. They hope to launch the payment service in the first half of fiscal 2020, according to informed sources.

The service will use quick response codes for transactions. Users can put money from their bank accounts on the smartphone app. It will also be possible to send money to other users.

Recruit operates Hot Pepper Gourmet, a restaurant guide website, and AirPay, a service for businesses to accept payments with a variety of cashless payment services.

The new joint company will capitalize on the network of clients of the two services to gain participating stores.

In the banking industry, Mizuho Financial Group Inc. has launched the J-Coin Pay smartphone payment service with regional banks. But the service has struggled to increase the number of participating stores, lagging behind popular smartphone settlement services such as PayPay and Line Pay.