Japanese mobile operator Softbank entered an alliance with U.S.–based Internet auction giant eBay to bring the PayPal online billing system to Japan for the first time.
The two partners are bringing about Y1 billion each to the new PayPal Japan joint venture.
Japanese are generally using other forms of electronic payment, while cash payments are still largely preferred. PayPal wants however to tap on the increasing smartphone market, which makes it easier for people to use electronic payment services.
The new service, called PayPal Here, has high ambitions, with Softbank president Masayoshi Son saying that it aims to become number one in online settlements in Japan. Users will install a thumb-sized device on their mobiles.
Softbank and eBay say their new combined service is cheaper than those of other competitors, at an initial price of Y1,200 followed by a flat-rate of 5 percent per purchase.