SoftBank’s Plans To Turn Digital Payments On Its (Global) Head

SoftBank, the Japanese company that just acquired a stake in Uber, is mulling creating a digital payments service aimed at taking on competitors like PayPal, Apple and Alipay.

According to news from The Times, citing various sources, SoftBank is contemplating supplanting the leading players in the digital payments realm by potentially leading a group backed by some of the world’s largest banks to create a new digital payments system. The system would act as a banking platform that multiple financial firms could deploy.

The idea is this: By creating the system as a consortium, the digital payments platform could cut costs and make it easier to roll out digital products and services. Sources familiar with the idea told The Times the plan is to create a “smartphone as a bank.” The report noted that to get such a service off the ground, SoftBank would have to purchase a large financial software company — with one potential target being Temenos, the Swiss technology company whose software is used by 41 percent of the world’s biggest financial institutions. Last week, Temenos denied a rumor that SoftBank had reached out, after its stock jumped by double digits. SoftBank declined to comment, noted the report.

Earlier this year, the Japanese firm completed its acquisition of a minority stake in Uber, the ridesharing company that has suffered from multiple scandals during 2017. With SoftBank’s investment, governance changes at the scandal-prone company are likely. Uber’s new Chief Executive Officer, Dara Khosrowshahi, will also have more control over the turnaround at the ride-hailing startup, though improving its financial position ahead of a potential October 2019 initial public offering (IPO) could be a challenge.

According to a recent report by The Financial Times, Rajeev Misra, who serves on SoftBank’s the board of director, said Uber would have a clearer and faster path to becoming profitable if it returned to a focus on its core markets in the U.S., Europe and Latin America instead of its stated goal: trying to be everywhere.