Line Corporation, the operator of Japan’s dominant messaging app, is infusing $182 million (JPY 20 billion) into its mobile payments subsidiary Line Pay as it looks to bolster its operations after a challenging 2018.
The company took the investment decision at a board meeting held on January 31, 2019. No other financial and operational details were revealed.
The announcement follows Line’s recent earnings update where it reported losses of JPY 5.79 billion and a 24 per cent growth in revenue to JPY 207.18 billion in the financial year 2018.
Japan is said to be pushing to hike its cashless payment ratio to 40 per cent by 2025, up from 20 per cent in 2016. It stills lags far behind China and South Korea when it comes to cashless payments.
Line claims to have 165 million monthly active users and 40 million registered Line Pay users across these four countries. It did start operations in Singapore but was forced to shut operations in February last year.
Alongside payments, Line is also expanding to other spaces including games, jobs, manga, and e-commerce, all of which entail huge investments.
In September last year, Line Corp announced that it was raising around 148.1 billion yen ($1.33 billion) through convertible bonds to fund its expansion in the financial services space. It was to spend the bulk of the money raised on the promotion of Line Pay and other new financial services by 2021-end.
Besides using its messaging app as a platform, the company is also looking to aggressively tap opportunities available in banking and other financial services.
The company inked a deal with Chinese giant Tencent, the operator of messaging app WeChat, in November last year to roll out a Visa credit card for Chinese travellers in Japan to make cashless payments via smartphone. The company also said it will offer banking services with Mizuho Bank, which is scheduled for launch in 2020.
Line has also partnered with South Korea’s Naver Corp., its parent company, to enable Naver users to make cashless payments. Naver operates Naver Pay, which claims to have about 24 million users.
In August, the company announced a new cryptocurrency called LINK, which will be given as rewards to users of its services and could be traded with other cryptocurrencies at its crypto exchange, BITBOX. Line is also looking to launch a digital bank in Japan and could also roll out loans and insurance products.