Alibaba to Help Standardize Mobile Payment in Japan


May. 22 2019, Published 2:54 p.m. ET

Standardized QR code to simplify mobile payment

Alibaba (BABA) will work alongside Tencent (TCEHY) and several other entities in Japan to help standardize QR (quick response) codes in the country with the aim of simplifying mobile payments, according to a report by the Nikkei Asian Review. Mobile payment has grown in popularity around the world, with Japan alone having more than ten different mobile payment services. But since individual mobile payment services currently use their own QR code standard to facilitate transactions, merchants and shoppers face challenges when it comes to working with different payment services. Now Japan is aiming to unify the different QR codes in the country, which could lead to broader uptake of mobile payments and widen the addressable market for companies like Alibaba.

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Other potential beneficiaries

The other companies that could benefit from standardized QR codes in Japan include Amazon (AMZN), Square (SQ), and PayPal (PYPL). Amazon introduced its Amazon Pay service in Japan last year, allowing retailers to access mobile payments in their stores. Square also sells payment terminals in Japan that can be used with QR code scanners to facilitate payments in store. PayPal also provides mobile payment in Japan and last year bought payment terminals vendor iZettle to expand its store presence.

Alibaba and Tencent set aside rivalry

The QR codes standardization project in Japan marks another example where Alibaba and Tencent have set aside their rivalry to tackle a common challenge. Recently, Alibaba and Tencent have found themselves backing the same businesses that have strategic importance to both of them.

Alibaba generated $13.9 billion in revenue and made $3.8 billion profit in the March quarter, which is its fiscal 2019 fourth quarter.


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