SoftBank Plans Big PayPay Push In Wake Of Line Pay Merger

SoftBank is out to double the users of its PayPay QR code payments app in the next three to four years, Reuters reported.

PayPay is on a roll. On Monday (March 1), Z Holdings Corp. (ZHD Group), which operates the PayPay app, said in a press release that it planned to merge with Line

SoftBank is Z Holdings’ parent company. The drive to expand the PayPay app’s reach comes as part of a push in Japan for more of a cashless economy. That would be a big change, considering the traditional habit of using cold hard cash.

Reuters said that PayPay has used SoftBank’s sales network and aggressive rebates to attract 36 million users in the three years since launch.

“We want to double the user base during the investment phase,” Z Holdings Co-CEO Kentaro Kawabe told Reuters. App operator Line has a reported 86 million domestic users.

New cashless payment options have popped in Japan in recent years. However, Reuters said, QR code payment apps have fueled growth by offering user rebates and waived transaction fees for merchants to drive growth

According to the Monday release, the services of PayPay and Line Pay will be “merged at the merchant level.” That move is set to begin in August.

ZHD Group has 23,000 employees and is one of Japan’s largest internet corporations. The company covers three sources of actions that the release calls indispensable to daily life — information, payment and communication.

The merger will come with a new offering — a new social commerce app to let users buy and send gifts. In addition, the release said, the new app, dubbed “X (Cross) Shopping,” will link product data of stores, both online and physical, allowing users to choose which they prefer.

The release said that there is also the possibility of having one app to that would let companies manage and operate physical stores, their eCommerce sites and social media sites.