All Nippon Airlines Boards Mobile Payments in its Operations

April 18, 2018         By: Steven Anderson

When it comes to technology, Japan is one weird place. While robots of staggering ingenuity are developed therein, it’s still routine to find fax machines up and running. Smartphones are in surprisingly short supply, and so too are mobile payments by some reports. That may be about to change, as Japan’s largest air carrier, All Nippon Airlines (ANA), looked to launch a wide-scale digital press, which would include a mobile payments arm.

The reports suggest that ANA is looking for a way to insulate itself against the volatile nature of airline profits, which can be up and down from one year to the next depending on the larger overall economy. So ANA is putting its collected data to use—with 31 million users of its airline miles program, that’s not out of line—to produce new services throughout Japan. These services include such necessities as insurance, including health, and real estate.

Basically, as described by ANA CEO Shinya Katanozaka, ANA is out to create a new version of Alipay. Katanozaka noted “We need to actively build new businesses to prepare for the changes in the new (digital) era. The non-core business can also provide a back-up when our mainstay airline business, which tends to be volatile, is facing a downturn.” Reports suggest that ANA wants to generate about one yen in five in its total revenue from non-airline services.

Right now, cash still represents about 70 percent of all transactions, and makes the Japanese mobile payments market tiny by comparison. Thus the market might well be ripe for such an entry. Should such a service emerge, backed by one of the biggest names in Japanese air travel, it could be a popular release in Japan, a country that takes reputation seriously in corporate matters. That might be enough to carry it past the standard concerns about security, but then there’s the matter of inertia; with 70 percent of transactions in cash, there has to be a reason to use mobile payments. If ANA can incorporate free miles into its payments, that might well be enough.

ANA has a good hand to play in pursuing greater mobile payments adoption, but can it pull it off? Only time will tell, but the basic elements seem to be in play.