Japan’s Line turns to SoftBank and cryptocurrency to make its messaging app a one-stop shop

Japanese mobile messaging company Line has offered up a major hint as to how it plans to make its messaging app a one-stop shop for just about any digital transaction.

First up, Line has offloaded a majority stake in its mobile virtual network operator (MVNO) subsidiary to SoftBank. The deal will see SoftBank procure 51 percent of Line Mobile, with Line retaining the remaining 49 percent.

A subsidiary of South Korea’s biggest web operator, Naver Corp, Line offers a WhatsApp-style messaging app that now claims 220 million users, the majority of whom are based in just a handful of Asian markets — including Japan. The company has also branched into numerous other verticals, including games, apps, mobile payments, carpooling, smart speakers, and, indeed, mobile networks.

Line, which embarked on a dual IPO in Tokyo and New York nearly two years back, revealed plans to become an MVNO in early 2016 before launching to the public later that year via a licensing partnership with NTT DoCoMo.

Fast-forward 16 months, and it’s clear Line needs a closer strategic alliance with one of the big three mobile network operators in Japan, one of which is SoftBank. Full details of the partnership are still to be decided through “mutual consultations,” but it should, of course, mean that Line will switch from NTT DoCoMo to SoftBank’s network. Additionally, the new partners plan to pool their collective strengths to become a “one-stop location” for just about everything. In effect, SoftBank will leverage Line’s scale and reach as a messaging company, while Line will be able to access SoftBank’s promotional and financial might to push its products and services to millions more across the region.

This is what Line refers to as its “smart portal strategy,” which it hopes will transform the Line messaging app into a conduit that “seamlessly connects people to information and services, as well as to companies and brands,” according to a statement.

“I am fully confident that Line Mobile will become one of the major mobile telecommunication services demanded by users in the future through its three proposed values of ‘simple’, ‘free’, and ‘value’,” said Line Mobile president Ayano Kado. “Through this partnership between Line — which brought to light a new form of communication in the smartphone generation — and SoftBank — the first carrier in Japan to carry the iPhone and drive the smartphone market — we will bring together our mutual strengths and strive to further improve users’ experiences with Line Mobile.”

Money talks

The company also announced a new subsidiary called Line Financial Corporation, which will serve as a complementary business to its existing mobile payments company, Line Pay, which launched in 2014. Line said that its Line Pay service, which works through the Line messaging app, processed ¥450 billion ($4.1 billion) last year, with 40 million registered users.

The new Line Financial business unit was established on January 10 of this year with around ¥5 billion ($46 million) in capital. It will essentially help create a new avenue for transacting all manner of financial products, including loans and insurance, through the Line messaging app. More interestingly, Line said it also plans to serve as a cryptocurrency exchange. The company said it has started the process of registering as a virtual currency exchange with the Financial Services Agency but gave no indication as to when this will likely bear fruit.

These plans all feed into the broader societal push toward a cashless and — increasingly — a wallet-less society. With that in mind, Line wants your phone to be the only item you need to buy anything you want.