Messaging app LINE to Grow its Digital Payments Business
Japanese messaging app LINE has invested JPY 20 billion (about $182 million) to bolster its digital payments operations in the country. In a notice, the company said the investment in LINE Pay Corporation was necessary for its future business operation.
Established in 9 May 2014, the Tokyo-based chat app expanded its operations into digital payments in July last year. Since then the firm has been growing its operations aggressively in the banking sector to drive its huge user base of 50 million registered users, which is nearly double the individual accounts of Japan's biggest megabank, MUFG Bank, part of Mitsubishi UFJ Financial Group.
The recent investment in LINE pay has come after the company announced losses of JPY 5.79 billion despite growing revenue of 24 per cent to JPY 207.18 billion, in its latest financial statement released in December last year.
As Japan is on a cashless drive, the messaging giant is tapping into the potential of the digital payment space. While Japan has long advocated for using cash to make payments, the country’s government is also trying hard to push for digital economy through 2020 Olympic Games. Apart from its core LINE Pay service, the company has also inked a deal with Chinese giant Tencent and operator of messaging app WeChat to roll out a Visa credit card, which will help capture Chinese tourists in the country.
One of the most popular apps in Asia, LINE has been making money through its cross-industry investments into the banking and finance sector. The company is also betting high on cryptocurrency as last year it announced the plan of offering loans, insurance and other services backed by its own cryptocurrency.
The company has also recently signed a memorandum of understanding (MOU) with local financial company Nomura Holdings to form a blockchain alliance. Nomura, which provides investment, financing and related services to individual, institutional and government customers, LINE and LVC Corporation, which oversees messenger's digital asset and blockchain business units, will sign a formal contract by the end of March 2019.
Beyond Japan, LINE Pay has a strong presence in three of the leading markets of Southeast Asia, including Thailand, Taiwan and Indonesia. According to a company’s report, LINE has over 165 million monthly active users combined and 40 million registered LINE Pay customers. The company is making its wide presence across Asia, but it hasn’t been lucky in Singapore where it had to shut down its operations in February last year. However, in September LINE announced it was raising about $1.33 billion through convertible bonds to expand into the financial services market of the island nation.