Mizuho’s New Digital Currency is set to increase competition in the cashless payments market

The Japanese Mizuho Financial group is set to unveil its much-awaited digital currency early this month. The firm will be looking to tap into the competitive cashless payment market. In one of its strategic moves, the well renowned financial group will maximize on directly linking the J-coin platform to its customer’s bank accounts to stave off the fierce competition from other major players.

The financial giant looks to have already made massive strides by combining efforts with 60 financial institutions which are spread evenly across the country. Together, they command a staggering 56 million active account holders who are on the J-coin pay platform in the form of digital wallets.

Since there are other well-established players in the cashless payments field such as the e-shopping firm, Rakuten and Line Pay (the popularly known chat provider) the competition will be stiff. J-coin pay will be tasked with figuring out the best way to position itself so as to claim a top seat as one of the leaders in cashless payments.

The process of using Mizuho’s platform will be no different from what is offered by others. A buyer will have to scan a QR code at the shopping point, where they will pay through the J-coin app. A unit of the digital currency will be fixed at a specific value of 1 yen. In addition, if the user wants to transfer money from the J-coin wallet to a bank account, the service will be provided free of charge. This is will be different from some of the competitors who charge for this service such as Line Pay.

Usually, one has to go through screening while signing up for credit cards. However, with J-coin, that will no longer be a requirement. Unlike other platforms, J-coin will attempt to accommodate all ages, including the minors. Under its umbrella, J-coin will also cover both remittances and payments which are also offered by Line Pay and its counterparts. This will include allowing coworkers to share bills as well as parents sending their children pocket money.

Mizuho plans will involve bringing stores on board. As of now, Family Mart, which is one of the largest stores in Japan is showing some interest in signing up with the platform. Other interested establishments are the likes of East Japan Railway and Bic Camera- an electronic retailer. Mizuho’s objective is to have at least 300,000 stores under their belt. In terms of users, they hope to reach over 6 million in a few years.  For the firm to achieve its target, it will seek to leverage the bank account users from all its member banks. One of its most dominant competitors, Line Pay is available in over 1.3 million stores. This means even with its current efforts, Mizuho will still lag behind by failing to have a large number of stores participating in the J-coin payment platform.

In a bid to be more competitive, Mizuho Group intends to seek lower fees from the transactions that will be conducted by its member stores. The fees will be more favourable when compared with the 2% and 5 % that credit cards commonly apply. Additionally, it aims at partnering with other widespread foreign services like Alipay from Alibaba Group Holdings.

Mizuho Financial Group set out to launch its money transfer service three years ago. Back in 2016, It joined forces with IBM Japan in testing its digital currency. Its main objective for introducing J-coin platform was to minimise the cost of money transfer. As of now, Megabank seems to have successfully achieved that goal. This is attestable by the low charges it’s willing to collect from its customers as they shop.  Furthermore, the participating retail stores will be charged lower fees in comparison to the competitors. Money transfers from J-wallet to the bank will attract no fee at all for the account holders.

Mizuho’s launch of a digital currency follows suit of the likes of JP Morgan, who unveiled their cryptocurrency a fortnight ago. This Megabank seems to be making all the right moves towards the future. Nonetheless, it remains to be known whether the J-coin cashless payment platform will battle its way through the strong competition and emerge as one of the top cashless payment options in the country.