PayPal has teamed up with Softbank to launch a joint effort in Japan and extend’s PayPal’s mobile payments service into Asia, Bloomberg reported.
Each company is putting in a 50/50 share with 1 billion Japanese yen or $12.5 million, and will each choose three directors. The CEO of the new company will be Softbank Mobile’s director and senior vice president Hiroaki Kitano. The company may eventually sell shares to the public, stated Softbank Chairman Masayoshi Son at a recent press conference in Tokyo.
“That’s the way both companies can benefit from the business if it succeeds, instead of absorbing profits from the venture,” Son said.
Softbank owns Yahoo Japan, a largely independent and successful portal which doesn’t share the troubles of its American cousin. Softbank is Japan’s third largest mobile phone company, and was the first to embrace the smartphone market.
Along with the launch of the Japanese company, the partnership will bring the “PayPal Here,” a triangular dongle that allows smartphones to run credit cards, to Japan, making it the fifth country after U.S., Canada, Hong Kong and Australia to offer PayPal’s mobile payments solution.
The “PayPal Here” service is often compared to Square, a mobile payments service that offers credit card payments through mobile devices. Though Square had a head start in its service, it is not yet international and only processes transactions made in the US.
At the Tokyo press conference, Son pointed out the service would also greatly aide large chain stores in addition to small merchants as it can cut down on long lines with easier access to processing services.
“At large electronics stores and supermarkets, dozens line up at cash registers, and customers have to wait. This allows workers at such stores to settle purchases immediately with their smartphones,” he said. “So I think it will be adapted at larger stores, not just smaller ones.”
PayPal had already operated a subsidiary in Japan. How the subsidiary will transfer to the new Japanese company is still being worked out, a spokesman said.