Press release

Merpay Announces Business Strategy at “MERPAY CONFERENCE 2019_SEP.”

Merpay announces various new initiatives with “a new ecosystem centered on trust (trust & openness)” as the overarching theme.

*Merpay, Inc., a fully-owned subsidiary of Mercari, Inc., issued the following press release.

Merpay, Inc., operator of the mobile payment service Merpay, held their business strategy conference “MERPAY CONFERENCE 2019_SEP.” on September 18th, 2019, where they announced their future business vision and strategies to the media and business partners.

The theme of the conference was “a new ecosystem centered on trust (trust & openness).” At the conference, Merpay CEO Naoki Aoyagi, CPO (Chief Product Officer) Takeo Iyo, and CBO (Chief Business Officer) Masato Yamamoto talked about Merpay’s business growth until now, and explained Merpay’s future vision, strategies, and partnership strategies toward further business expansion.

Below is a summary of the announcements made at the conference.

Part 1: Merpay Growth History (Reflecting on Merpay’s Business Growth)

In the first part of the conference, Merpay CEO Aoyagi announced the latest numbers with regards to Merpay’s usage since the service’s launch in February 2019, as well as the newest initiatives being planned (countermeasures against fraud and measures to handle the upcoming consumption tax increase).

Merpay’s Latest Usage Data


・Merchants Accepting Merpay Payments: 1.7 million locations
*Including locations where Merpay is scheduled to be installed. (900,000 locations accepting “iD” payments, 800,000 locations accepting code payments)

・Financial Institutions Allowing Account Connections: 100
*Including those scheduled for connection.

・Users: 4 million users
*Total sum of users registered for Merpay Electronic Money, users of Merpay code payments, net payments, Merpay deferred payments, etc. (overlapping users omitted) as of September 2019.

・Continued Usage Rate: 78%
*Ratio of users who used Merpay again in the next month out of all users who used Merpay for the first time to make a payment at an offline merchant store in May 2019. A portion of first-time payment users who made their entire payment using free points are excluded.

Merpay, PayPay, and LINE Pay Collaborate to Strengthen Countermeasures Against Mobile Payment Fraud


Following the succession of recent fraud attacks on mobile payment services, Merpay, Inc., PayPay Corporation (Headquarters: Chiyoda-ku, Tokyo, CEO: Ichiro Nakayama), operator of the mobile payment service “PayPay,” and LINE Pay Corporation (Headquarters: Shinagawa-ku, Tokyo, CEO: Youngsu Ko), operator of “LINE Pay,” are working together to strengthen measures against fraud across the industry as a whole. The three companies are working together to share information related to fraud more closely and securely, and are reviewing the countermeasures against fraud currently driven by Payments Japan Association and formulating guidelines.

Initiatives Toward the Consumption Tax Increase


Merpay has been registered as a payment business as part of the Ministry of Economy, Trade and Industry’s cashless consumer businesses program (point rewards program) in anticipation of the consumption tax increase to start on October 1st. By using Merpay, customers will be able to receive up to 5% rewards.

Furthermore, leading up to this initiative, Merpay will hold a promotion between September 18th and 30th in which users who complete their personal identity verification for the first time on Merpay will receive point-back rewards (https://jp.merpay.com/news/2019/09/campaign/).

In addition, Merpay will run a promotion in which merchants who apply to become a Merpay QR Code Payments merchant*1 by March 2020 will have the usual 1.5% payment processing fee for online merchants lowered to 0%, and will receive 5% cashback (up to 3,000 JPY per month) for payments made between October 1st and June 30th, 2020.*2

*1 All merchants implementing the “Merpay Merchant App” or “customer code reader” code payments systems are eligible. Merchants who have already implemented Merpay QR Code Payments are also eligible.
*2 If the total cashback amount that Merpay, Inc. provides reaches 1 billion JPY, the cashback scheme will end even if it is still during the campaign period. However, the transaction fee for offline merchants will continue to be 0% (lowered from the standard 1.5%) throughout the campaign period.

In this way, Merpay aims to run promotions that benefit both customers and merchants to promote the usage of cashless payments throughout Japan.

Part 2: Next Payment Strategy (Merpay’s Future Payment Business Strategy)

In the second part of the conference, Merpay CPO Iyo announced Merpay’s plans for further business growth as a mobile payment service through open partnerships in the cash in and cash out domains with Mercari and external partners under the concept of “openness.”

Partnerships in the Cash Out Domain


1)Merchant Alliance: KDDI Joins the “Mobile Payment Alliance” (MoPA)
Merpay, Inc., LINE Pay Corporation, NTT Docomo, Inc. (Headquarters: Chiyoda-ku, Tokyo, President: Kazuhiro Yoshizawa), and KDDI Corporation (Headquarters: Chiyoda-ku, Tokyo, President: Makoto Takahashi) have signed a letter of intent to enter a business alliance with the aim of promoting the realization of a cashless society.

In addition, KDDI Corporation has joined the Mobile Payment Alliance (hereinafter referred to as MoPA) launched by Merpay, Inc. and LINE Pay Corporation in March 2019, later joined by NTT Docomo Inc. in June of the same year, and will work together to promote the realization of a cashless society within Japan.
*Refer to this link for details:https://jp.merpay.com/news/2019/09/mopa/

2)Public Alliance: “Benefit-your-locality” Tax Scheme Through “Furusato Choice”
Merpay will be accepted as a payment method for Furusato Choice (scheduled for November 2019), Japan’s largest “benefit-your-locality” tax scheme website, operated by Trustbank, Inc. (Headquarters: Meguro-ku, Tokyo, President: Tamayo Sunaga). This will allow customers to use the revenue (Merpay balance) they earn from selling items they no longer need on Mercari to contribute to a local government of their choice on Furusato Choice.

3)Public Alliance: Contributions to Local Governments Through Mercari and Merpay
The Mercari marketplace app plans to launch a new feature that will allow users to donate their revenue earned from selling unneeded items directly to a local government (release date to be determined).
In the future, Merpay plans to expand further in this domain and allow payments for various public fees beyond “benefit-your-locality” taxes and donations.

Partnerships in the Cash In Domain


1)Collaboration in the Remuneration Payment Domain
Merpay, Inc. has signed a letter of intent with CrowdWorks Inc. (Headquarters: Shibuya-ku, Tokyo, CEO: Koichiro Yoshida, hereinafter referred to as CrowdWorks), VisasQ Inc. (Headquarters: Meguro-ku, Tokyo, CEO: Eiko Hashiba, hereinafter referred to as VisasQ), and Lancers, Inc. (Headquarters: Shibuya-ku, Tokyo, CEO: Yosuke Akiyoshi, hereinafter referred to as Lancers) to investigate the payment of remuneration, incentives, and other forms of income* besides salary via digital payments, with the aim of facilitating the realization of a society with diverse work styles and methods of receiving remuneration.
*This refers to incentives and remuneration where the Labor Standards Act does not apply.

Through this partnership, remuneration, incentives, and other forms of income besides salary earned through the various services provided by CrowdWorks, VisasQ, and Lancers are scheduled to be receivable (chargeable) directly to users’ balance on the mobile payment service Merpay.

This initiative will start prior to the government’s promotion of salary payments through digital money, and will be limited to forms of remuneration besides salary. Individuals who receive remuneration will no longer need to withdraw cash from an ATM whenever they receive funds to their bank account and charge the money to their mobile payment account, and will be able to use the funds via mobile payments immediately after they are paid.
*Refer to this link for details:https://jp.merpay.com/news/2019/09/receive_rewards/

Partnerships in the Online Payments Domain in Collaboration with Mercari


1)Strengthening Online Payments
The Mercari app, operated by Merpay’s parent organization, is growing to become the largest marketplace app in Japan, currently possessing an annual GMV of 490.2 billion JPY (in 2018) and 13.47 million users per month. In the future, Merpay will enhance its synergy with Mercari by introducing an easy one-tap Mercari listing feature for purchases made through Merpay online payments based on purchase history (scheduled to launch in early 2020). Leading up to the release of this feature, over 50 new e-commerce websites, mainly in the fashion industry, are scheduled to accept online payments via Merpay.

Online Payments Partner Sites (alphabetical order) *Scheduled for launch.


In addition, ANAP Inc. (Headquarters: Minato-ku, Tokyo, CEO: Toshiyasu Yataka), operator of ANAP Online Store, CROOZ SHOPLIST, Inc. (Headquarters: Shinagawa-ku, Tokyo, CEO: Takao Harimoto), operator of the fashion e-commerce site SHOPLIST.com by CROOZ, and Stripe International Inc. (Headquarters: Shizuoka City, Shizuoka Prefecture, CEO: Yasuharu Ishikawa), which has developed multiple apparel brands including Earth Music & Ecology, have already agreed to connect the Mercari listing feature, and the companies will be working to implement it in the near future.
Merpay looks to support product development and sales utilizing second-hand distribution data and continue to provide business benefits to merchants in the future.

Part 3: Merpay Credit Design (Expanding the Payment Experience With “Trust”)

In the third part of the conference, Merpay CBO Yamamoto announced the numbers regarding usage of Merpay’s core service, Merpay Deferred Payments, and a brand new Merpay Deferred Payments service that makes even more flexible payments possible for customers.

Latest Usage Data for Merpay Deferred Payments

Merpay launched deferred payments in April 2019. This payment service uses AI technology to determine the proper usage limit for each customer based on their past track record on Mercari and Merpay. Customers can then make purchases within this usage limit using Merpay payments, and make a single payment for their purchases in the following month.

Since its launch, the service has received positive reviews from users for how convenient it is to make payments easily without needing to charge to your account, and the number of users has been steadily increasing. Traditionally, financial institutions use passive attribute information of their customers to set usage limits, like their existing salary on file with their financial institution, whether or not they own a home, or their family structure. However, Merpay employs a new form of trust, deciding the most appropriate usage limit for each user based on their dynamic track record and ratings, including whether they conduct transactions courteously, pay by deadlines, and so on. As a result of this approach of setting amounts customized for each user based on “trust,” Merpay operates at the high standard of 99%* of payments completed.
*From May 2019 usage data, by unique users.

Introducing the New “Merpay Deferred Payments”: Flexible Payments in Installments

Applying this new concept of trust, Merpay will further expand the Merpay Deferred Payments service and allow flexible payments in installments starting in early 2020*.

With the new Merpay Deferred Payments, users can grow their usage limit based on their track record on Mercari and Merpay, and can not only make payments in the following month, but even split payments across multiple months. This service gives users greater freedom than ever to choose a payment plan that suits them.

By providing this flexible method for payment, users will be able to obtain items previously out of reach at the time they need it.

Merpay also helps customers manage their usage and payments. To avoid potential issues that can arise from paying for purchases over long periods of time, such as difficulty keeping track of payments and visualizing the total sum to be paid, Merpay allows users to view their repayment status for each item purchased in a single list, and even rewards users with Mercari points when they make payments early.

In addition, a new feature is scheduled to be released which will allow users to list the items they purchased on Mercari simply by tapping a button on the repayment status screen. This feature will make it possible for users to try out the item they purchased for a fixed period of time only, and makes the process of choosing to purchasing a different item instead smooth and easy.

Video introducing the service:https://youtu.be/M32g5qzhw04
*Multiple inventions related to this service have been submitted for patent application (patent application 2019-168152, etc.).

Closing Note: Merpay’s Vision (Merpay’s Vision For the Future)

Establishing “A New Ecosystem Centered on Trust”

In the future, Merpay will continue aiming for further growth as a mobile payment service through open partnerships with both Mercari and external partners (cash in/cash out). In pursuit of their mission of “building trust for a seamless society,” Merpay plans to utilize the transaction data and purchase history from Mercari and Merpay to create a new form of trust and expand the payment experience for all users.

Concept video:https://youtu.be/7cLEsqU8VUI

With “building trust for a seamless society” as their mission, Merpay will provide various services in the future, beyond just methods for payment.