SoftBank is planning an Initial Public Offering (IPO) for its Japanese payments app operator, PayPay, in the U.S. market. With 70 million users—more than half the country’s population—the service has significantly dominated the domestic market since its launch in 2018, processing over 7.8 billion transactions during fiscal year 2024. In one year alone, a fifth of all cashless payments in Japan were made via PayPay.

PayPay holds two-thirds of the domestic code payment sector in Japan, showcasing its strong market presence and user base. The upcoming IPO is anticipated to raise over $2 billion, with an estimated valuation between $10 billion and $12 billion.

In Search of Market Share

The U.S. market for payment apps is highly competitive, as evidenced by the popularity of services like Zelle, which has over 150 million users, and Venmo, with close to 90 million.

The mobile payments space is already saturated,” noted Ben Danner, Senior Analyst from Javelin Strategy & Research. Legacy players such as PayPal have expanded their offerings into in-store payments, while newer entrants like Affirm and Klarna provide hybrid payment solutions that blend physical with digital channels. For another player to succeed here, it will need to offer compelling value to consumers, such as targeted merchant rebates, personalized experiences, and attractive rewards.”

New Strategic Alliances

In line with this strategy, SoftBank has been exploring new areas for PayPay. Most recently, in November 2024, the company teamed up with Alipay+, Ant International’s mobile payment solution, to enhance cross-border payment capabilities for international visitors traveling in Japan.

Additionally, PayPay entered into a partnership with GCash, a Filipino payment service. This move underscores the company’s focus on expanding its footprint across Asia, where it already has banking partners. Notably, SoftBank became the first Japanese company to offer direct salary payments through a digital wallet—PayPay—in September 2024.