Japan’s LINE Chat App to Bank with Mizuho and Partner with Tencent for Mobile Payments
Line Corp, a Japanese chat operator is partnering with Mizuho Financial Capital Group and China Tencent Holdings. Together, they’ll offer mobile payment services as well. The partnership has caused Tencent’s stock price to increase by 13 percent.
Of course, the banking entity needs to receive regulatory approval because it can start transactions. Once approved, the bank is poised to provide services to Line Corp’s 80 million users. There is still no indication as to what types of services will be offered. Further, Line will own 51 percent of the bank.
Retailers in Japan seem to be ready to adopt Line Pay services as well. The payments will be processed through Tencent’s WeChat pay. This type of system may work well for Line, which is looking for additional revenue streams to offset a lack of users in its flagship application. Ultimately, the platform is trying to expand into cryptocurrency, payments and stock broking.
According to Takeshi Idezawa. Line’s chief executive, “We expect financial services to start contributing to profit in the medium term. We are making bit investments in fintech and AI.” The fintech industry in Japan are also looking to provide financial services for their users and retailers are interested as well.
Toshitsugu Okabe of Mizuho added, “It will give us a point of contact with a younger generation, which we megabanks are not good at reaching.” Mizuho is not the only financial entity to partner with Line. Nomura Holdings Inc., Japan’s largest brokerage and investment banking group, also joined.
There has also been an increase in tourism from China, and as a result, Japan is making an effort to attract tech titans from China. This may promote faster cashless payments for tourists and it may also encourage customers to use payments using QR codes, which are popular in China, but not yet in Japan.