PayPal Partners With Japan’s SoftBank to Form Digital Payments Joint Venture
PayPal said late this evening it is establishing a multimillion-dollar joint venture with SoftBank, an Internet and telecommunications provider in Japan, to work together on the future of digital payments there.
The joint venture will be called PayPal Japan, and while the details are a little bit fuzzy, the two companies say they are both committed to investing $12.5 million into the entity. Softbank Mobile’s SVP and director Hiroaki Kitano is expected to be the joint venture’s CEO.
As part of the announcement, PayPal and SoftBank said Japan will be the fifth country to receive PayPal Here, the mobile payments service that allows merchants to accept credit cards using a cellphone and a small magnetic reader attached to the headphone jack.
The service has already launched in the U.S., Canada, Hong Kong and Australia. Japan is the first market where PayPal has formed a joint venture and partnered with a wireless carrier for the launch.
The two announcements are being made in Tokyo today at a press event with eBay’s CEO John Donahoe and PayPal’s President David Marcus, along with Masayoshi Son, SoftBank’s CEO and PayPal Japan’s CEO Kitano.
SoftBank is one of the largest wireless carriers in Japan with 29 million mobile subscribers, making it a good fit for helping PayPal to get to know the local market. PayPal will also be able to tap into the Japanese carrier’s network of retail stores to help with the distribution of the card readers.
Together, the two companies said they expect to displace cash transactions in Japan, but clearly, the partnership could address other digital wallet solutions in the future.