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Rakuten Group Inc. announced on Thursday its plan to combine its mobile payment platform with its credit card unit, a strategic move potentially paving the way for a future listing of the beleaguered card business.
According to The Japan Times, while Rakuten Group achieved strong proceeds from its core e-commerce offerings, it lost money for 12 straight quarters. The losses are said to be due to the costly expansion of its mobile phone business, which has failed to pick up steam in Japan despite tremendous efforts.
Because there was not enough cash coming in, Rakuten tried to generate money by selling off some of its businesses, like its internet banking unit, the Rakuten Bank. In any case, the company will consolidate its mobile payment units and fold them into its credit card and loan units.
Once the merging is completed, Rakuten Card is expected to become the company's powerhouse in its integrated payments business. The Japanese financial technology company may also enter into strategic partnerships to boost its income. If needed, Rakuten said it would also raise its own capital.
"Rakuten Card and Rakuten Payment will work together to promote the business, hence we decided on this reorganization because we believe that we can further improve synergies within the Rakuten Group," Rakuten said in a press release. "We believe that this reorganization will lead to the expansion of the Rakuten Group's customer base and the strengthening of our growth strategy, which in turn will contribute to the enhancement of corporate value."
The company further stated, "In addition, by further strengthening the cooperative framework between Rakuten Card and Rakuten Payment, we believe that it will be possible to formulate strategies from a broad perspective for expanding the Rakuten ecosystem. Going forward, Rakuten Card, which will be the driving force behind the integrated payment business, will flexibly consider forming strategic partnerships with third parties and raising its own capital as necessary."
Photo by: Rakuten Media Resources
