SoftBank Plans to Launch PayPay into Crowded U.S. Market

SoftBank has begun planning an initial public offering in the United States for its Japanese payments app operator, PayPay. The service boasts 70 million users in Japan—more than half the country’s population—but the IPO would enter a crowded U.S. payments app market.

Since its launch in 2018, PayPay has dominated the Japanese market, processing more than 7.8 billion payments in fiscal year 2024. Last year, one in every five cashless payments in Japan—including credit cards and electronic money—was made via PayPay.. In the domestic code payments sector, the company claims two-thirds of the market share in Japan.

The PayPay offering may raise more than $2 billion from investors when it takes place, expected as early as Q4 2025.

Analysts estimate the IPO could value the company between $10 billion and $12 billion.

Softbank has stated that it plans to use the funds to expand services, develop cross-border payment solutions, and invest in AI-driven financial products.

Looking for Market Share

It makes sense for Softbank to look at avenues beyond simple payments. That market is already highly competitive in the U.S., with Zelle claiming more than 150 million users and Venmo at 90 million.

“The market is flooded with ways to pay, ranging from merchant wallets to loyalty apps to universal wallets such as Apple Wallet,” said Ben Danner, Senior Analyst, Credit and Commercial at Javelin Strategy & Research. “With legacy companies such as PayPal offering in-store payments and more recent players such as Affirm and Klarna offering hybrid physical and mobile ways to pay in-store, the mobile payments space is well saturated. Launching another payment app into the fold is going to require some serious value add on behalf of the consumer in the form of targeted merchant rebates, hyper-personalized experiences, and rewards.”

New Partnerships

To that end, Softbank and PayPay have been exploring new fields. Last November, PayPay teamed up with Alipay+, Ant International’s mobile payment offering, to expand its ability to handle cross-border payments for international visitors to Japan.

PayPay also recently partnered with Filipino payment service GCash.

Although its services remain concentrated in Japan, PayPay has banking partners all across Asia. Interestingly, last September, SoftBank became the first Japanese company to offer its employees direct salary payments to a digital wallet—PayPay’s digital wallet, naturally.