The news: Google is reportedly in negotiations to acquire pring, a Japan-based cashless payments startup, for between JPY20 billion ($187.3 million) and JPY30 billion ($281 million), according to Nikkei Asia. The acquisition would give Google access to pring’s vast partner network, which includes 50 national banks and major companies like 7-Eleven. The tech giant hopes to use pring to launch proprietary financial services in the country.
The opportunity: Pring can help Google move deeper into Japan’s cashless payments market.
- Japan has substantial room for cashless growth, which Google can harness to its advantage: In 2020, cash accounted for more than 50% of all transactions in the country, as opposed to neighboring countries like South Korea, where it made up 34%, per McKinsey. But Japanese consumers have warmed to cashless payments because of the pandemic and government initiatives that have encouraged their use, with a goal of expanding cashlessness over the next four years. Operating with a local player could help Google move further into the market at an opportune time and capture market share before it matures.
- Google can use pring’s partner network to expand Google Pay acceptance. The number of proximity mobile payment users in Japan is projected to hit 27 million this year, up from 24.8 million in 2020, per Insider Intelligence forecasts. Google can capitalize on this growth and use pring’s existing partners to make its payment product available at more locations throughout the country, helping it compete against local players like PayPay, which has a strong presence in the market.
The bigger picture: Google has been expanding further into financial services: In the US and other markets, it launched the revamped Google Pay app, which features solutions like cash management tools, banking services, and retail perks—it might be looking to replicate some of these services in Japan. Google may also test out new financial solutions in Japan that it can bring to other markets—something it’s done in India—as it moves beyond payments.