LINE Pay Enters the Fray
SNA (Tokyo) — The now ubiquitous Japanese messaging app LINE has unveiled it’s “LINE Pay” service in June, and announced that it would be expanding its financial services. LINE is partnering with megabank Mizuho to offer banking services: LINE will own 51% of the bank and Mizuho will own the other 49%. Additionally, it was announced that LINE Pay services will now work cooperatively with Chinese financial giant Tencent’s WeChat Pay.
According to the latter arrangement, Chinese tourists who use WeChat to make purchases in China will now be able to do the same in Japan. Businesses that accept LINE Pay will also be able to accept payment from WeChat through the same system. LINE and Tencent will keep costs low for small and medium-sized business that wish to adopt mobile pay services, in order to boost availability of the service and practicality of the app. Processing fees will be waived through July 2021 for businesses that adopt the new payment option. Additionally, since payment QR’s are scanned by the app user, stores will not have to implement new scanners.
In 2017, 7.35 million Chinese tourists visited Japan. This year, during China’s Golden Week in October, Japan surpassed Thailand for the first time as the most popular overseas destination for Chinese travelers. The ease of access to payment for WeChat users aims to further promote Chinese tourism to Japan. This follows a move by China’s Alipay, who began to offer their services in Japan several months ago through a partnership with Yahoo Japan and SoftBank.
After unveiling the partnership yesterday, the value of LINE’s shares has already increased by 17%. This is an important boost for the company, whose value has dropped by 20% over the last year due to a stagnation in new usership.
LINE’s partnership with Tencent will not only benefit them, but it will help Japanese businesses as well. Stores have found that tourists using cashless payment apps spend more than other tourists. Not only will the number of tourists from China increase, but the amount they spend will presumably increase.
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