FILE PHOTO: A Tencent sign is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 4, 2017. REUTERS/Aly Song/File Photo
TOKYO (Reuters) – Japanese chat app operator Line Corp (3938.T) announced a tie-up with China’s Tencent Holdings (0700.HK) to offer mobile payment services, and plans to set up a bank with Mizuho Financial Group Inc (8411.T), sending its shares up 13 percent on Tuesday.
Japanese retailers offering Line Pay services will be able to process payments from the growing numbers of Chinese tourists using Tencent’s WeChat Pay from early next year, Line said.
Line also plans to establish a bank with Mizuho Financial Group Inc (8411.T), a source with direct knowledge told Reuters, declining to be identified because the plan is not yet public.
Officials at Mizuho were not immediately available to comment. A Line spokeswoman declined to comment on its plans to start a bank. The news was first reported by public broadcaster NHK.
The news of the tie-ups provided some relief for Line’s flagging stock, lifting it as much as 17 percent before closing up 13 percent and adding about $1 billion to its market value.
The shares are still down more than 16 percent in 2018 as, with user numbers for its eponymous flagship app stagnating, Line expands services in areas like payments and bitcoin.
Mizuho and Tencent’s shares were flat. Tencent’s shares are down more than 25 percent this year, hammered by a prolonged regulatory crackdown on its core gaming business in China.
With growing numbers of Chinese tourists visiting Japan, the country is becoming increasingly attractive for China’s tech titans, with Alibaba Group Holding’s (BABA.N) affiliate Ant Financial and Didi Chuxing announcing services in recent months.
Japan has been slow to move to cashless payments, with a rush of new entrants like SoftBank Group Corp (9984.T) backed PayPay and Line Pay looking to encourage consumers to use QR code payments, which have become widespread in countries like China and India.
Reporting by Chang-Ran Kim and Sam Nussey; Editing by Stephen Coates and Muralikumar Anantharaman