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Creating the Future of Finance with PayPay_Vol. 1

Az

02/16/2022

At PayPay, we use data and technology to make money more accessible and convenient. In this series, we will show you what we as a company want to do, and the vision we have for enriching people’s lives through easy access to financial services that meet changing needs as we all advance through different life stages.
For this issue, we talked with Yanase-san, head of the Finance Business Strategy Division, and Kawata-san, head of the Finance Business Promotion Division, both of whom were assigned to their current roles on January 1.

Masayoshi Yanase, Division Head, Finance Business Strategy Division / on the right in the photo

After first joining Vodafone Corp., he subsequently worked in Vodafone Group Marketing, SoftBank Mobile Corp. Product & Service Division, SoftBank U.S. Inc. as the Product Strategy Manager, and SoftBank Corp. Business Development Division as the Fintech Business Planning Manager. He joined PayPay in August 2018 and is in charge of financial services (Pay Later, bonus management, insurance mini app) and mini apps (UberEats, DiDi, PayPay Mall, PayPay Flea Market, Accelerator Program).

Hiroki Kawata, Division Head, Finance Business Promotion Division / on the left in the photo

He first worked for Yusen Broad Networks Corporation (now USEN Corporation), then moved to Yahoo Japan Corporation in 2005. He joined PayPay in 2018 after serving as head of the Business Promotion Division and the Consumer Business controller of YAHUOKU!, as well as a controller at a commerce company. He is now in charge of negotiations with financial institutions for top up cost management, Myna-Point, JPQR, LINE Pay integration, liaison activities with relevant ministries and agencies, and intra-group collaboration with SBKK and ZHD.

The Future of Financial Services with PayPay

Please tell us in detail the future you want to make with PayPay.

Yanase:

I want to create a world where everyone can truly benefit from financial services in an organic way, and make our lives more convenient! When I say “everyone,” imagine our elderly parents and children in elementary school using these services smoothly. I think PayPay is already a service that can be easily used by my parents’ generation and even my kids and their friends. We are aiming to create something like that with financial services.

Kawata:

Just as there are many people who started using smartphone and code payments for the first time since PayPay came out, we hope to provide financial products that are easy, convenient, safe, and exciting for everyone—both users who’ve been using financial services, as well as ones who’ve never been exposed to such services.

As of January 1, the Finance Business Group was newly established, and you were appointed as heads of the Finance Business Strategy Division and Finance Business Promotion Division. Please tell us the role of each division regarding the future of finance that PayPay wants to realize.

Yanase:

I would say that Finance Business Strategy Division’s scope of duties is strategy development, planning, and launch of financial businesses. I believe that this division will play a leading role in creating new businesses based on “tech-fin” created by PayPay.

Kawata:

The role of the Finance Business Promotion Division is to collaborate with partners inside and outside of the group to promote financial businesses and features created by PayPay, and to get users to use them. That way, we can maximize PayPay’s revenue. Having said that, we are still in the process of building that framework.

What exactly is the world PayPay is envisioning, for it to become the fintech company both in Japan and the world?

Yanase:

I joined PayPay in August 2018, and including my time at SoftBank, I’ve already been involved in the fintech business for five years. But there are still so many things to work on.

The financial services we have today, including online ones, are still inconvenient and difficult to use. If you want to start investing, you need seed money, but it takes time to prepare such funds. After that, you must go to financial institutions for consultations and opening an account. You also have to consider the time you spend waiting in line. Then there is a screening process, after which the card is finally sent to you… For a while now, people have accepted all this hassle as being part of financial services.

But as a user, you want to start when you wish to, and start easily with a small amount of money even if you don’t have much capital. There simply hasn’t been a financial service like that, and if there were, people would want to use it.

PayPay’s starting point has always been the user’s perspective. You can easily top up with the app, use it anytime, and instantaneously know how many points you’ve earned based on the paid amount, which I think is appealing to users.

All kinds of services in the world have been made convenient online thanks to the Internet and apps, right? For example, you don’t have to wait for the evening or late-night news, as you can read the news online. The same goes for movies, music, and shopping.
So, why are financial services lagging? Why is it still normal for people to queue up in front of an ATM on payday? Why are existing financial products so difficult to use? This is the point of departure for our task at hand.

The bonus management we released last year allows us to start investing with only 1 yen, even without opening an account.

Yanase:

Bonus management also allows users to stop their investment and withdraw at any time. Since the funds being used are originally the PayPay Bonus granted at the time of payment, it doesn’t hurt to try one’s hand at asset management. The threshold to start is low. We made it possible to use the service from as little as 1 yen to achieve this ease of use.

Right now, financial products are inconvenient, confusing, and difficult to start using. Why is that? We want to make them more accessible by eliminating the factors that discourage people from trying them out. We also want to do this with banks, securities, and credit cards, as well as all aspects of using money: payments, growth, savings, and being prepared. For example, an AI can provide guidance instead of financial advisers. We would also like to make the UI and UX immensely easier to comprehend and use.

Is that the answer to the innovation dilemma?

Kawata:

That’s right.
There are many financial services in Japan, but even the number one service only has a handful of users. In other words, very few people in Japan are using financial services, and the vast majority are not yet exposed to them. If we can provide easy and convenient financial products with PayPay, we can reach a potential user base that has yet to be exposed to such services.

There are still only a handful of users, so we want to expand the market with PayPay.

Yanase:

Currently, only about 10% of all users use online banking. Investing is about the same. In addition, only around 20% of the population owns a securities account. I want to change this situation and create a new market for the non-use majority! I believe there’s huge potential there.

Kawata:

Even if we are at the top in shares, we are only talking about a small domain.
I want us to seize the opportunities available in this large population.
To achieve this, we want to first grow the number of PayPay users. We need to become a presence that makes people think, “I might want to experiment with PayPay.”

Yanase:

We believe that by combining PayPay with financial services, we can expand each other’s business opportunities. There is definitely a need for services for various life events, like education plans, end-of-life care, and inheritance. Also, simply by creating various wanted financial products, we can offer both young and old the appropriate ones. It’s cause for joy if the number of users increases as a result of finding PayPay convenient.

You could use data to suggest services and uses that suit the person.

Kawata:

In order to do that, we want to use our data capabilities to deliver services and products that are right for each person. Also, for example, we can use data to provide the right stuff to people who aren’t familiar with financial services or have never used them before. And by using data, plus seeing their usage, we can also better protect our users. Providing safety and security is absolutely essential in financial services. This is certainly one thing we need to include in the package!

Yanase:

Even with bonus management, many people around me enjoy looking at the chart every day. As a result, they started using PayPay on a daily basis and eventually started taking interest in purchasing financial instruments for the first time.

Kawata:

It’s fun to shop with that extra money! I feel like I got something extra. It also makes me want to brag to people, “I practically got it for free!” I hope this would be a catalyst for a positive chain of events.

Kawata-san, you are from Yahoo! JAPAN, and Yanase-san from SoftBank. This seems like a great opportunity to leverage your differences and strengths.

Yanase:

The question I ask is, “What kind of financial services do we want to create?” This is like chasing a moving target, so I believe that the company should always consider itself a startup, and grow by sprinting and constantly breaking boundaries. If you come to PayPay from the financial industry, you will be able to leap into the fray of and truly experience digitalization. It’s really dynamic and thrilling here. On top of that, the experience, knowledge, and connections to the outside world that you gain here will definitely come in handy in the future.

Kawata:

Going through trial and error with financial business as the pillar of our enterprise—I’m sure this will be a unique and fulfilling experience, as the finance industry is a crucial part of the economy. PayPay’s in-house development and production capabilities, combined with the strengths of the SoftBank Group’s banks, securities, and credit cards, as well as the media and services of Yahoo! JAPAN and LINE, can elevate us to become the fintech company.

In the process of innovation, opinions may vary throughout the company, or conflicts and misinterpretations may occur. How do you resolve them?

Yanase:

This may have become our corporate culture by now, but at PayPay, users come first, then merchants, and finally our business. Large companies tend to think about the third—business—first, but at PayPay, we are user-first through and through.

Kawata:

Yes. At PayPay, we have debates but surprisingly few disputes.

Yanase:

I guess because we always prioritize the user’s point of view, there are hardly any squabbles. Within the company, we’re always talking about the user’s perspective. It may be no exaggeration to say that we have a “user-only” perspective. Nakayama-san always tells us, “This is not ‘user-first!’ “

So, if users are the main focus, there is no mistake?

Yanase:

Exactly! If we prioritize our users, we can clearly see what the right answer is. When the business gets all the attention, the meaning of winning and losing becomes fuzzy depending on how you look at it, but when the user is at the center, there is no ambiguity.

Kawata:

Going forward, when we’re not sure about a measure, when I have conflicting opinions with colleagues from different backgrounds, or our focus deviates over a long period of time, I’ll repeatedly say, “Users are king!” That way, we won’t make any mistakes. I want to always keep this idea in mind and pass it on to those who join us in the future.

Yanase:

To do that, you need to be able to look at yourself objectively and say, “I’m facing an innovation dilemma right now.” At the same time, it’s absolutely necessary to have an environment that makes you realize, “I was only thinking about the business, wasn’t I?”

What kind of people do you want to work with?

Yanase:

A person who has knowledge and expertise in finance, but can also find issues that users—first of all, themselves—are not aware of, figure out solutions, follow through, and take on new challenges. If you want to create something new together in a place that is full of opportunities (admittedly somewhat chaotic), we’d be delighted to welcome you.

Kawata:

You can be experienced in finance, or even have no experience at all. Market conditions are constantly changing, so I would like to see people who can keep up with the shifting target.

Yanase:

I believe that Asia and East Asia will become an epicenter of mobile payments. Of course, there are many excellent services in other areas as well. Each country’s market has both shared and unique aspects, so it’s important to learn them, but originality is also crucial. I want to see people from all over the world who can think of and create their own models as they keep an eye on cutting-edge fintech products overseas.

Still Day 1.

Is it still Day 1?

Yanase:

Yes, it’s still Day 1.
We haven’t accomplished anything.
I’ve been working in fintech for five years counting from my days at SoftBank, but there’s just so much left undone.
That’s why we’re looking forward to new members joining us in creating the future of finance.

Special thanks: Masayoshi Yanase & Hiroki Kawata / Author: Az (PayPay Inside-Out Editorial Team) / Translator: Justin / Translation Editor: Kye
*Employees’ affiliations are as of the time of the interview.​​​​