Japanese Mobile Payments Market Steps Up With Naver, Kakao Involvement
Japan is a strange place, technology-wise. While there are fewer places more advanced in robotics development, the fax machine is also still in regular and even frequent use. Places you’d never imagine innovation to appear are commonplace, while commonplace developments elsewhere are nearly unheard of. Mobile payments is an oddly sluggish business in Japan, though there are signs that that may be turning around with two new competitors in the field.
The latest reports note that both Kakao Pay and Naver will hit the Japanese market this June. Such a move won’t mean much to the typical Japanese citizen, but rather for Korean tourists making a move to Japan instead. The move came in the wake of newly-revised regulations that opened up the ability for local mobile payments operations to operate overseas.
Mobile payments systems represent an excellent competitive prospect, reports note, as they don’t charge fees for purchases made overseas like credit cards commonly do. Card users typically pay about a one percent surcharge to card companies when shopping in different countries, and that makes the potential benefit of expanding a mobile payments system to cover those purchasers a smart idea. It also allows users to bypass the currency exchange process, which saves not only money but also time.
The two new firms are entering the market thanks to partnership operations; Naver is teaming up with not only Japan’s own Line Pay, but also Tencent’s WeChat Pay, which has a substantial Japanese presence. Kakao Pay, meanwhile, is teaming up with Alipay, WeChat Pay’s primary competitor.
While this doesn’t exactly help put more mobile payments opportunities in Japanese hands—these two firms are pretty much exclusively targeting Korean tourists—it may help light a fire under local firms. If it becomes clear that Korean tourists—not to mention Chinese tourists—are all putting mobile payments to work, maybe Japanese firms will realize such a large and untapped market lurks beneath their own feet. Maybe it will also give Japanese consumers a look at a potentially better way of doing business as well.
This is a move that could have a lot of impact, and if nothing else, will make tourism a lot easier from the Korean peninsula.