SoftBank has initiated plans for an initial public offering (IPO) in the United States for its Japanese payments app operator, PayPay. With 70 million users in Japan—nearly half the country’s population—the service has significantly dominated the market since its launch in 2018, processing over 7.8 billion payments in fiscal year 2024 and accounting for one-fifth of all cashless transactions last year.

Market Dominance and Expansion Plans

The PayPay app has claimed a two-thirds share of the domestic code payment sector in Japan. The company’s recent offerings may raise more than $2 billion from investors, with projections indicating potential valuations between $10 to $12 billion.

SoftBank intends to utilize these funds to expand services, develop cross-border payment solutions, and invest in AI-driven financial products.

Competitive Landscape

The market for mobile payments in the U.S. is already crowded with established players like Zelle, which boasts over 150 million users, and Venmo, with 90 million active users. The landscape includes various payment methods such as merchant wallets, loyalty apps, and universal wallets like Apple Wallet.

According to Ben Danner, Senior Analyst at Javelin Strategy & Research, With established companies like PayPal providing in-store payments, and newer players like Affirm and Klarna offering hybrid physical and mobile solutions, the mobile payment space is highly saturated. Introducing another app into this market will require significant value for consumers through targeted rebates, personalized experiences, and rewards.”

New Partnerships for Expansion

SoftBank and PayPay have been exploring new partnership opportunities to expand their reach. In November 2024, PayPay collaborated with Alipay+, Ant International’s mobile payment service, to enhance cross-border payments for international visitors in Japan.

In addition, PayPay partnered with the Filipino payment service GCash, reflecting its broader presence across Asia. Notably, SoftBank was the first Japanese company last year to offer direct salary payments through a digital wallet—PayPay’s digital wallet.