China's tech giant Tencent Holdings and Japan's biggest mobile applications developer Line Corp have teamed up to establish a mobile payment platform that will allow small Japanese businesses to earn from the millions of Chinese tourists visiting Japan on a yearly basis.
There are about 7.35 million Chinese tourists who came to Japan in 2017, according to Nikkei Asian review citing data from the Japanese government. The number was three times more than the Chinese visitors in Japan three years ago.
Small Japanese retailers, however, could not take advantage of the economic opportunity that Chinese travelers bring in as the latter are used to cashless payment method, particularly with using mobile payment apps.
Under the partnership, Line will lease terminals with Tencent's WeChat Pay to provide cashless payment portals for the tourists. These terminals will be located across Japan's small to medium-sized restaurants and stores starting mid-December. The portals will be operational starting next year, Nikkei reported.
Cashless payments allow customers to generate QR code-based transaction. The system has become popular among Chinese as does not require them from bringing money during trips. This payment option is also popular in India.
QR-code based payment, however, has been experiencing a slow take off in Japan; hence, big players in cashless payment segment are rushing to position themselves as the pioneering service in the country.
The partnership between Tencent and Line, in fact, faces competition with a similar collaboration between Alibaba Group Holding, and Japan's Yahoo and SoftBank Group.
Yahoo and SoftBank have already been operating the PayPay mobile service before entering a partnership with Alibaba. Under the arrangement, Alipay customers can also conduct payments through PayPay member stores.
The Tencent-Line and Alibaba-SoftBank partnerships are racing to capture the market comprised of about 700 to 800 million costumers.
Line has been aggressively seeking partnerships that will provide alternative income as users for its flagship chatting app has been torpid in the recent period, Reuters reported. The company is trying to expand in the payment services, stock brokerage, insurance, and even cryptocurrencies.
Takeshi Idezawa, Line chief executive, said they hope financial services will augment their profit in the medium term. Line has also been aggressively venturing out into financial technology and development of artificial intelligence.
Tencent, on the other hand, has also been aggressive in diversifying its effort as it awaits approval from Chinese regulators regarding its flagship game content. China has implemented tougher gaming rules this year - a move which has been extra challenging for Tencent.
