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LINE to Partner with WeChat for Mobile Payments in Japan

2018-12-19 10:53 Wednesday

More than seven million Chinese tourists visited Japan in 2017, up 15 % from the previous year. The number of Chinese visitors to Japan has tripled over the last three years, making Japan an attractive market for  tech companies in China.

WeChat payment

Chinese internet giant Tencent and Japan-based social networking platform Line recently announced a partnership with plans to launch a mobile payment app in 2019 for small Japanese retailers. Many large retailers in Japan that are popular among Chinese tourists already accept WeChat Pay, but most smaller merchants do not. Line aims to tap into this niche by  Line Pay and WeChat Pay increasingly accessible.

Line, Japan's largest messaging app  with 78 million users, will provide unregistered retailers that accept Line Pay with terminals compatible with WeChat Pay. Line will not charge processing fees for three years in order to attract a large user base.

Line noted that WeChat Pay users will be able to purchase items with WeChat Pay at stores in Japan that accept Line's mobile payment platform, known as Line Pay, starting from next year. "Demand by inbound tourists will surely surge from this point on, and Line Pay will enable stores to be ready for that," said Hisahiro Chofuku, Chief Operating Officer for Line Pay.

However, Japanese consumers are still reluctant to use their phones to conduct payments, and 80% of transactions in Japan are in cash. In contrast, mobile payment services have skyrocketed in China, where credit cards have very low penetration. Mobile payment transactions on third-party Chinese mobile platforms reached $15.4 trillion in 2017, compared with only $2 trillion in 2015.

The Line and WeChat partnership will compete from other local mobile payment companies including Paypay, which recently launched a consumer mobile payment app in October. Paypay is the fruit of a collaboration between India-based mobile wallet company Paytm, Yahoo Japan and SoftBank. Japanese e-commerce giant Rakuten is also scheduled to enter the Japan mobile market in October, 2019.

Rakuten also established partnership with KDDI, who will use Rakuten's payment platform and network of around 1.2 million affiliated stores in Japan to launch its own barcode and QR payment service, named au PAY, in April 2019.

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