April 26, 2024

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Japan’s dominant messenger app Line and Mizuho, one of the three mega banks in the country, are one step closer to launching Line Bank with the establishment of a preparatory company earlier this week, industry sources said on May 29.

Line Financial and Mizuho Bank established Line Bank Preparatory Corp. on May 27, setting up a legal entity and kicking off the prelaunch preparations for a smartphone-focused bank. Line Financial, the company’s financial services unit, provided 51 percent of the 2 billion yen ($18.28 million) capital, while Mizuho funded the rest. 

Line Bank can be launched after the preparatory company receives a banking license. The two companies said they expect it to start operations in 2020.

The firms have been working together to launch the bank since November last year to make synergies by combining their competitive edge. Line with 78 million active monthly users will develop a user-friendly platform to offer seamless financial services, while Mizuho will provide its banking know-how.

Line has been aggressively expanding its presence in Japan after establishing Line Financial in January 2018. In October last year, it launched Line Smart Invest and Line Insurance. Its online payment service Line Pay is growing fast as the Japanese government encourages digital payments but competition with rivals such as PayPay, backed by SoftBank and Yahoo Japan, and Rakuten Pay is also getting fierce.

Line is also preparing to offer securities and loan services.

By Park Ga-young (gypark@heraldcorp.com)