PayPal and Softbank launch payments JV | Mobile Payments | Mobile Entertainment

PayPal and Softbank launch payments JV

PayPal and Softbank launch payments JV
Tim Green

by

Payments / May 9th 2012 at 12:31PM

First priority is launching PayPal Here dongle across Japan.

The two partners will each invest one billion yen ($12.5 million) in the project, called PayPal Japan. Hiroaki Kitano, an SVP at Softbank Mobile, is expected to become its CEO.

It's quite a coup for PayPal, which only unveiled the PayPal Here card processing dongle last month - after seeing rival Square close in on $1bn in annual transactions for its accessory.

Softbank said only 12 per cent of financial transactions in Japan are by credit card, and that there's still a huge cash economy.

Products like PayPal Here and Square make card payments accessible to cash-deopendent smaller traders by removing the need for costly POS readers. All they need is a dongle and a phone.

Softbank CEO Masayoshi Son said: "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.

"So I think it will be adapted at larger stores, not just smaller ones."

PayPal and Softbank  will charge 1,200 yen for the dongle, and take a five per cent commission on all transactions. Japan will follow US, Canada, Hong Kong and Australia in launching PayPal Here.