It Begins: Alipay Targets Japan

August 18, 2017         By: Steven Anderson

Japan is a country of almost bizarre technological contrasts. A country famed for its robotics developments and its prowess in video game development is also known for its anachronisms like routine use of fax machines and almost shocking lack of smartphones. Mobile payments haven’t exactly taken off there either, and a new report suggests Alipay might be targeting Japan for one of its many expansions.

Japan has been a cash-focused society for quite some time now, and shaking up that development with mobile payments might be seen as a hard sell. However, Japan is a pretty substantial market with a lot of affluent spenders, and that makes it an excellent target for a payment processor, a point not lost on Alipay parent company Ant Financial. So Alipay is actually heading to Japan, but under a completely new brand name.

Japan’s use of mobile payments has been comparatively light, though Apple Pay has made significant inroads thanks to a growing percentage of the population that turns to iPhones for mobile devices. It’s also easy to forget that, until just a few years ago, cash was king in China as well. So the idea that Alipay’s Japanese brand could take off in Japan isn’t really out of line.

Additionally, the steady growth of the Chinese tourist class is prompting some substantial change worldwide as well; businesses that never would have taken af Chinese mobile payments system before are doing so now in a bid to better accommodate these travelers. We’ve also seen plenty of active developments on Alipay’s part to get a presence into more countries, perhaps most recently with Alipay’s partnership with Yelp.

The brand change, however, is probably a necessity. There’s no shortage of historic bad blood between the Chinese and the Japanese dating as far back as the late 1800s and the first of two Sino-Japanese Wars. The notion that the Japanese, therefore, would trust a Chinese mobile payment system does seem a bit unlikely. A brand name change, however, would provide something of a fig leaf and potentially open up a market that might not be so interested without it.

Still, it’s obvious that mobile payments in general are a very young market, and in Asia—China and Japan included—this is no different. This could be the start of something big.