MUFG Bank Ltd. and Recruit Holdings Co. have decided to set up a joint venture that will issue a digital currency, or "coin," the bank has been developing, it has been learned.
The idea is for the venture to start out with smartphone payments for individuals and later move into other areas such as payments between companies. The partnership between MUFG, Japan's largest bank, and Recruit, a leader in information services, will seek to attract customers by fusing their expertise in finance and information technology.
The firms signed a contract to form the joint venture in October. MUFG is expected to hold a 49 percent stake in the new company, with the remaining 51 percent held by Recruit. They are seeking approval to act as a fund transfer service provider and for other requirements to become a cashless payment business, with the goal of launching the service in the first half of fiscal 2020.
Customers will be able to make payments with the coin, using a QR code on a specified smartphone app. The coin can be issued by transferring funds from a linked bank account. The funds can be redeposited into the bank account. The service will also be available for non-MUFG bank accounts. Money transfers between users are expected to be part of the service.
The MUFG group has about 34 million individual customers and about 1.3 million corporate customers in Japan. Recruit operates websites that are popular among young people such as the restaurant site Hot Pepper Gourmet and the hotel booking site Jalan.net. The digital currency is expected to be used as a means of payment at about 1 million shops, mainly among member stores of these sites.
In the smartphone payment market, LINE Pay and PayPay have had a head start in drawing users, but MUFG and Recruit hope to take advantage of their customer bases and other strengths.
Looking ahead, they are considering offering a payment service for businesses using a technology called blockchain, as well as payroll payments via digital currency, an area the government is currently studying.
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