PayPay Corporation (hereinafter “PayPay”), LY Corporation (hereinafter “LYC”), and Z Financial Corporation (an intermediate holding company for the domestic financial businesses of LYC; hereinafter “Z Financial”) have today decided to transfer the common shares and Class A preferred shares of PayPay Bank Corporation (hereinafter “PayPay Bank”) held by Z Financial to PayPay, subject to the approval of the relevant authorities, etc., for the purpose of expanding financial businesses around PayPay. The Group will aim to further improve the convenience and customer satisfaction of financial services offered by PayPay.
Background and objective of this transaction
PayPay has thus far focused on enhancing the features and services for its users and merchants, and has driven cashless payments in Japan, achieving 66 million* registered users in approximately six years since service launch, and JPY12.5 trillion in consolidated GMV in FY2023. Furthermore, through the consolidation of PayPay Card Corporation (hereinafter “PayPay Card”) in October 2022 and capital investment in PayPay Securities Corporation (hereinafter “PayPay Securities”) in April 2023, PayPay has accelerated the linkage between various services and PayPay, striving to expand a variety of financial services beyond just cashless payments. With PayPay Card, PayPay has worked to unify the service experience between the PayPay app and credit card, significantly increasing the number of active cards issued and transaction volume. Similarly, with PayPay Securities, customer acquisition through the PayPay app has been successful, leading to a dramatic increase in the number of accounts opened and the balance of assets managed. The businesses of both PayPay Card and PayPay Securities have steadily expanded after their participation in the PayPay Group.
PayPay Bank launched its business in September 2000 as Japan’s first pure internet bank under the name, The Japan Net Bank, Limited, and became a consolidated subsidiary of Yahoo Japan Corporation (now LY Corporation) in February 2018, strengthening the banking function within the Group. In April 2021, it changed its trade name from The Japan Net Bank, Limited to PayPay Bank Corporation. The collaborations between PayPay and PayPay Bank continue to deepen through measures such as easy opening of PayPay Bank accounts in the PayPay app and use of PayPay Bank’s function for the Account Number for Payment to the Salary Account in PayPay Paycheck, PayPay’s service that supports digital salary payments.
To enhance convenience and customer satisfaction centered around financial services for users, merchants, and corporations, further strengthening of collaborations between PayPay and PayPay Bank is crucial beyond just service linkages within the PayPay mini app. Thus, the share acquisition by PayPay was determined to achieve this purpose, subject to the approval of the relevant authorities, etc. PayPay’s participation in the management of PayPay Bank as a new shareholder will accelerate the service collaborations within the PayPay Group. Furthermore, efforts will be made to provide new financial experiences leveraging PayPay Bank’s business experience accumulated over the years, integration with the PayPay app, and product and service developments utilizing PayPay’s data and technological capabilities.
*Number of users who have registered their accounts as of October 31, 2024.
Shareholders and voting rights ratio of PayPay Bank before and after the share transfer
| Before Share Transfer | After Share Transfer | |||||
|---|---|---|---|---|---|---|
| Shareholder | Common shares | Class A preferred shares | Voting rights ratio (After conversion*) |
Common shares | Class A preferred shares | Voting rights ratio (After conversion*) |
| PayPay | 0 | 0 | 0.0％ (0.0％) |
354,000 | 883,000 | 46.57％ (75.28％) |
| Z Financial | 354,000 | 883,000 | 46.57％ (75.28％) |
0 | 0 | 0.0％ (0.0％) |
| Sumitomo Mitsui Banking Corporation | 354,000 | 0 | 46.57％ (21.54％) |
354,000 | 0 | 46.57％ (21.54％) |
| Fujitsu Ltd. | 40,000 | 0 | 5.26％ (2.43％) |
40,000 | 0 | 5.26％ (2.43％) |
| Mitsui Sumitomo Insurance Company, Limited | 4,000 | 0 | 0.52％ (0.24％) |
4,000 | 0 | 0.52％ (0.24％) |
| TAIJU LIFE INSURANCE COMPANY LIMITED | 4,000 | 0 | 0.52％ (0.24％) |
4,000 | 0 | 0.52％ (0.24％) |
| SUMITOMO LIFE INSURANCE COMPANY | 4,000 | 0 | 0.52％ (0.24％) |
4,000 | 0 | 0.52％ (0.24％) |
*Class A preferred shares are convertible into common shares at a ratio of 1:1 by exercising the right to request acquisition with common shares as consideration.
PayPay Corporation is registered as follows:
・Prepaid Payment Instruments (third party type) Issuer (Registration number: Director-General of the Kanto Finance Bureau, No. 00710 / Registration date: October 5, 2018)
・Business Operator that Concludes Contracts on the Handling of Credit Cards (Registration number: Kanto (Ku) No. 106 / Registration date: July 1, 2019)
・Telecommunications Carrier (Filing number: A-02-17943 / Date filed: July 2, 2019)
・Fund Transfer Operator (Registration number: Director-General of the Kanto Finance Bureau, No. 00068 / Registration date: September 25, 2019)
・Notified Entity Entrusted with Intermediation (Filing number: C1907980 / Date filed: December 18, 2019)
・Bank Agency Services (License: Director-General of the Kanto Finance Bureau (Gindai) No. 396 / Registration date: November 26, 2020)
・Financial Instruments Intermediary Services (Registration number: Kanto Finance Bureau Director (Kinchu) No. 942 / Registration date: June 25, 2021)
・Electronic Payment Agency Services (License: Director-General of the Kanto Finance Bureau (Dendai) No. 109 / Registration date: February 14, 2023)
・Designated Funds Transfer Operator, permitted to provide digital payment of wages （Designation No.: Minister of Health, Labor and Welfare No. 00001 / Date of designation: August 9, 2024)
・Japan Payment Service Association (https://www.s-kessai.jp/, Date of admission: September 12, 2018)
・Japan Consumer Credit Association (https://www.j-credit.or.jp/, Date of admission: July 1, 2019)
* “PayPay” offers four types of electronic money and other services: PayPay Money, PayPay Money Lite, PayPay Points, and PayPay Gift Vouchers.
PayPay Money can be used to pay for partner services and merchants if it is within the amount deposited into the PayPay account opened after completing an identity verification process. It can also be used for sending and receiving money between PayPay users free of charge. PayPay Money can also be cashed out to a designated bank account (no withdrawal fee if using PayPay Bank). The legal nature of this is an electromagnetic record which can be used to pay for goods and services, can be remitted or cashed out, and is issued by PayPay who is a Fund Transfer Operator registered under Article 37 of the Payment Services Act. PayPay Money (Paycheck) refers to PayPay Money that can only be purchased with wages received by the PayPay user in their Paycheck Account. Based on the provisions of Article 43 of the Payment Services Act, PayPay protects the debt it owes to its users by depositing assets equivalent to or higher than the debt amount. PayPay Money Lite is an electronic money issued by PayPay, which can be purchased and used to pay for services and merchants. PayPay users can transfer and receive PayPay Money Lite free of charge. The legal nature of this is a prepaid payment instrument issued by PayPay (Article 3, Paragraph 1 of the Payment Services Act). Based on the provisions of Article 14 of the Payment Services Act, PayPay preserves the relevant assets for the purpose of protecting the owners of the prepaid payment instrument by providing a security deposit for issuance to the Legal Affairs Bureau in an amount that is half or more of the unused balance of prepaid instrument methods as of March 31 and September 30. In addition, PayPay Points, which are granted through campaigns and promotions when using PayPay, can be used for partner services and in transactions at merchants in addition to PayPay Money and PayPay Money Lite. However, it cannot be transferred to other users or cashed out. PayPay Gift Voucher is a type of electronic money issued by PayPay, which can be used to make payments for affiliated services and merchants designated by the PayPay Gift Voucher. However, it cannot be transferred to other users or cashed out. PayPay Gift Vouchers have an expiration date, after which they will no longer be valid. The deadline for Gift Vouchers can be confirmed in the details or specifications of the measure or promotion campaigns for which they are issued.
PayPay also strives to create a safe and secure environment for users. If an unexpected payment is made by a third party using a PayPay account, or if a request to settle a payment suddenly arrives from PayPay to a user that does not have a PayPay account, there is a scheme that ensures compensation for the damages suffered (the difference will be provided as compensation if compensation is also provided by a third party), given that the prescribed conditions are met. Please see “Applying for compensation” for details.
*Company names, trade names, and products/services in this press release are registered trademarks or trademarks of their respective companies.
