Mercari, the flea market app in Japan with nearly 15 million users, announced Thursday it is purchasing Origami, a payments platform also in Japan. The purchase amount is undisclosed, according to DealStreetAsia.
Mercari plans to merge Origami Pay with their own Merpay service to battle competition from Softbank’s rival app PayPay.
With plans to compete in U.S. markets against larger companies with similar business models like Craigslist and eBay, Mercari intends to improve current money losses with the expansion.
Unlisted Origami has not revealed data about its user total and demographics. The app lets consumers make payments with QR codes popular in Chinese and Indian markets.
Mercari’s June 2018 IPO netted the company $7.4B. Last year, in a move anticipating this week’s, Mercari partnered with another company, Line, for a joint mobile payment arrangement against fierce competition in Japan’s cashless payment space. The country is “one of the most heavily cash-dependent economies in the world” and the government now intends to move consumers away from a traditional reliance on cash and double the cashless payments transactional rates to 40 percent by the year 2027.
SoftBank acquired 23 million users when an earlier 10 billion yen ($90 million) rebate campaign resulted in high consumer demand at discount electronics stores. One less effective attempt to attract users to digital payments was by convenience store operator Seven & Holdings, a Japanese convenience store, which unsuccessfully tried to increase digital payments as customers abandoned the company’s 7pay service in 2019 after a cyberattack on some users.
Japanese customers have a long history of utilizing online payments services for purchases such as train tickets, but retailers have been slow to move beyond traditional transaction arrangements like cash and credit cards. No cashless payment method has gained traction despite the government’s encouragement and a technology shift in consumer sectors.