By Anton Bridge and Ritsuko Shimizu
TOKYO (Reuters) – Japan’s largest credit card company, Rakuten Card, is aiming to almost double its annual operating profit to 100 billion yen ($663.7 million) in the medium term and sees opportunity in expanding into the largely untapped business-to-business payments market, its new chief executive officer said.
Although Japan’s shrinking population is hitting demand in much of the domestic economy, the credit card and payments markets are a rare growth area as digitalisation of financial services booms in what was once a cash-dominated economy.
Rakuten Card, which is online-only and part of Rakuten Group – an e-commerce and financial services conglomerate – has ridden this wave to issue more than 30 million credit cards to date – the most in Japan – and booked an operating profit of 62.1 billion yen in 2024, up more than 20% on 2023.
While credit card payments now make up around a third of consumer spending in Japan, less than 10 trillion yen of a total 1,100 trillion yen in business to business transactions are made by credit card, Rakuten Card CEO Koichi Nakamura told Reuters in an interview.
“It’s really not a red ocean so it makes sense for us to enter the market without delay,” Nakamura said.
Across the group Rakuten has direct contact with a host of small- and medium-sized firms who sell on its Ichiba e-commerce platform, to which it can offer credit card services.
For larger corporates, where Rakuten has limited reach, it hopes to tap into the client base of business and capital alliance partner Mizuho Financial Group, Nakamura said.
Mizuho acquired 14.99% of Rakuten Card’s stock last year and the two launched a joint credit card in December.
“It’s not an investment in form only. Already we are jointly creating services and doing marketing,” Nakamura said.
Discussions on what other services the two can collaborate on are at an early stage but may include packaging up services like payment settlement and processing, Nakamura said.
($1 = 150.6700 yen)
(Reporting by Anton Bridge and Ritsuko Shimizu; Editing by Stephen Coates)
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