Square has announced that they are expanding their mobile payments service outside of the US, and the first country where Square will be available in will be Japan. They have partnered with SMCC, the company who introduced Visa to Japan.
Business’s in Japan will be able to take payments using the Square system, and they will be charged a fee of 3.25 percent per transaction. Although Square will have quite a bit of competition in Japan from established players like KDDI and JTT DoCoMo who already offer similar systems, the company is optimistic about its prospects.
“I am honored to introduce Square to a country with a rich history of design, innovation and tradition. Square shares the same values and attention to detail in our products,” said Square CEO and co-founder Jack Dorsey.
Square’s Expansion Strategy
Square’s move into Japan is a significant step in its global expansion strategy. Japan is known for its advanced technology and high adoption rates of mobile and digital payments. By entering this market, Square aims to tap into a lucrative and tech-savvy customer base. The partnership with SMCC is strategic, as SMCC has a deep understanding of the Japanese market and a strong network of merchants who could benefit from Square’s services.
The 3.25 percent transaction fee is competitive, but Square will need to differentiate itself from local competitors. KDDI and JTT DoCoMo have already established a strong presence in the mobile payments space in Japan. These companies offer integrated services that include mobile payments, telecommunications, and other digital services, making them formidable competitors.
Challenges and Opportunities
One of the challenges Square may face is the cultural and regulatory differences between the US and Japan. The Japanese market has unique consumer behaviors and preferences, and Square will need to adapt its services to meet these local needs. For example, cash is still widely used in Japan, and while mobile payments are growing, they are not yet as ubiquitous as in some other countries. Square will need to educate both merchants and consumers about the benefits of its system to drive adoption.
On the other hand, Japan’s strong focus on innovation and technology presents a significant opportunity for Square. The country has a high smartphone penetration rate, and consumers are increasingly looking for convenient and secure payment options. Square’s user-friendly interface and robust security features could make it an attractive option for both merchants and consumers.
Moreover, Japan’s tourism industry is booming, and many international tourists are already familiar with Square from their home countries. This could help drive adoption among merchants who cater to tourists, providing them with a seamless and recognizable payment option.
It will be interesting to see if Square becomes popular in Japan and whether they will be able to have similar success as they have had in the US. The company’s ability to adapt to the local market and effectively compete with established players will be crucial to its success.
Source TechCrunch
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