The credit card unit of Sumitomo Mitsui Financial Group Inc. (NYSE: SMFG) is seriously eyeing the financial-technology sector of the United States of America for investment as Japan has a strong intention in catching up with several other developed economies of the globe in the field of electronic payments. Sumitomo Mitsui Card Co. has met over 500 so-called fin-tech organizations during the past two years so that they could narrow down their list to around 10 as their potential targets for tie-ups or acquisitions, as stated by President Ken Kubo in a recent interview.
The unit also tasted success in the year 2012 when it purchased a stake in Square Inc., the mobile payments company of Jack Dorsey worth $10 million and was ready to spend up to $830,000 or 100 million yen on each of the deals, as claimed by President Kubo.
PM. Abe trying to give a boost to cashless transactions
Prime Minister Shinzo Abe intends to give a push so that there is a growing momentum towards cashless transactions which coincides with the efforts of Kubo in a similar direction. This will be indeed a revolutionary change for a traditional society that still gives a higher priority to traditional payment versus cashless transactions. Kubo also stated that with the increase in the number of foreign or overseas visitors and aging of Japan’s population, one of the key steps in turning around the economy of Japan would be through an increasing access to the various options for alternative payment.
Kubo declared that the fin-tech innovation revolves around the use of mobile apps and Internet and is increasingly popular in European nations and in the United States of America. However, the Japanese Society is still relatively unfamiliar about these services. Kubo stated that credit companies like Sumitomo Mitsui Financial Group Inc. have a big role to play for giving creative suggestions for applying the latest technologies.
Sumitomo Mitsui Card is also interested in those organizations and card-device makers that have the relevant skills including that of cloud computing though any potential targets were not named during the conversation. In Japan, as on date, the crash transactions still reign supreme. In the year ending on March 2014, only 14% of the total Japanese consumers used credit cards while about 54% of the consumers used cash transactions for their purchases. This data is according to a report published by Credit Saison Co. According to the economic revitalization strategy of Abe, the government of Japan will try to improve the efficiency as well as the convenience of payments by ensuring the prevalence of cashless options before the Tokyo Olympics.