How LINE Pay is pivoting on past experiences to win big in Asia
JAPAN is a unique market. Its advanced technology wows visitors from around the world, and yet, the country still seems to predominantly rely on physical currency notes for small transactions.
For fintech companies, this was an incredible challenge — but messaging app LINE’s fintech arm LINE Pay thought it was the best time to plunge into the market.
“Regionally, cash is fast disappearing and all markets are striving towards a cashless society at an accelerated rate and as Japan’s largest messaging platform, we aim to connect our platform’s user base to a broader ecosystem and payment is a critical component in this effort,” LINE Pay CEO Youngsu Ko told Tech Wire Asia.
To be honest, LINE only intensified its focus on payments last year in line with a wider push into financial services.
Half-way into 2019, company executives believe they’re making great headway in Japan and using insights from their success in the Japanese market to win in other Asian markets such as Thailand and Taiwan.
Establishing a digital payments network in Japan
According to Ko, one of the biggest challenges for the company was the recruitment of merchants to increase adoption and acceptance in local markets.
What LINE Pay found was that partnering and supporting local SMEs was what helped them succeed quickly.
“LINE launched the Merchants App to Japanese SMEs which works as a LINE Pay reader and does not charge transaction fees for three years.
“Merchants need not invest in their own contactless payment readers as the app can be downloaded for free and can also dictate a date for payment to be transferred to their account.
“Through this, we positioned LINE Pay as a cost-efficient and seamless payment gateway for SMEs and have since seen over 1.33 million merchants in Japan, using it to date.”
But that wasn’t the end of it. LINE Pay also partnered with mobile payment provider Merpay in order to expand its merchant network, allowing mutual access to both companies’ merchants.
Further, the company partnered with Tencent to allow WeChat Pay users visiting Japan to make payment with WeChat Pay at LINE Pay merchants.
Finally, LINE Pay partnered with Korean search engine operator NAVER’s payment platform Naver Pay to enable users from Korea to make cashless payments in Japan.
Overall — collaboration has been the foundation of LINE Pay’s rapid growth and success.
“LINE Pay merchants benefit by tapping into the demands of cashless payment service users from the top two countries (China and Korea) in terms of the number of inbound visitors to Japan.
“Through such alliances, merchants can enjoy the benefits of an increased potential user base at lower installation costs.”
Pivoting on success in Japan to thrive in Asia
“With the success in Japan, our regional team utilized local consumer insights to offer relevant payment services to local users,” emphasized Ko.
In Thailand, therefore, LINE offered a mobile service for users to purchase train tickets directly through the app allows users to top-up their LINE account at every BTS station in the country.
In addition, the company partnered with banks like CTBC in Taiwan and credit card companies like Visa and JCB to introduce co-branded credit cards.
“We understand that cards are currently the most used and understood payment method. Therefore, the partnerships we’re creating ensure that our users have a positive experience utilizing our services and platform immediately.”
To succeed in Asia, LINE is definitely looking to leverage partnerships and collaborations — it’s not only what has worked for the company in the past but is also a strategy some of the large, traditional financial institutions such as HSBC and DBS are using in the region.
“Through deep understanding of users regionally and partnering with key financial services players, we aim to narrow the distance between merchants, customers, money and services by eliminating the existing gaps between society today and the cashless future,” highlighted Ko.
That’s the vision for LINE Pay and that’s the strategy that the brand expects to leverage and thrive with in the coming months — across Asia.
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