PayPay Store Fees Will Not Cause “Merchant Withdrawal” Reasons Mobile Payment Journalists Expect

PayPay will finally charge the system usage fee of member stores on October 1st. Since the service started on October 5, 2018, the company has continued to take measures to free payment fees for stores that use the “MPM method” in which users read the QR code posted by the store on their smartphones.

Campaign will be implemented due to the charge for system usage fees of member stores

We have acquired many affiliated stores, mainly small and medium-sized stores, because “there is no additional cost at the time of contract and can be stopped at any time”. PayPay has become available in 3.4 million locations as of August 2009. However, after October 1st, this fee will be 1.98%.

I think that some member stores will withdraw from using PayPay in response to this, but in conclusion, the phenomenon of “withdrawal of member stores” does not actually occur so much with PayPay charge. The author’s expectation is that this is not the case. The majority will be in the pattern of “continue as is”. In addition, for the industry as a whole, PayPay’s fee setting of just under 2% will make it harder for competitors to take a strategy of making payment fees.

What happens in the field of code payment due to fee charges

From 2018 to 2019, when new entrants to the mobile payment industry continued, with the intention of countering PayPay, each company was conducting a campaign with no payment fees for MPM member stores in principle. These measures gradually shifted to paid plans before the free period of PayPay ended.

According to Mr. Tsutomu Tahara, who is the director of the wallet business promotion office at NTT DoCoMo, d-payment is promoting a fee charge for some stores, but member stores No noticeable withdrawal was seen. It seems that the charge will not immediately lead to the departure from affiliated stores.

However, when PayPay announced specific fees in August 2009, rivals such as Rakuten Pay and au PAY will continue to offer free member store fees for one year. Announced to extend. The extension of the commission-free campaign of rival companies has a strong intention to lead PayPay by developing new stores rather than retaining existing member stores.

PayPay, known for its enthusiastic efforts to develop affiliated stores, especially in small and medium-sized stores, in addition to major chains, seems to have not introduced cashless payment so far. It has the merit of making it possible to use non-cash payment methods even in private stores. This is because the company has introduced a large amount of sales resources and expanded the roller operation nationwide, and other companies were behind in that respect.

There are many PayPay member stores around Kii-Tanabe Station in Wakayama Prefecture

According to Mr. Tahara, recent trends It is these small and medium-sized merchants rather than the major chains that support the growth of d-payment, and the extension of the fee-free campaign has great significance in acquiring such new merchants. Rather than creating a topic that sewed the gap that PayPay charged, it seems that the intention is to “continue business growth.”

PayPay Vice President COO Hajime Baba

On the other hand, it is expected that rival companies will face great difficulties in the future in terms of monetization of the merchant network that has expanded in this way. PayPay does not intend to earn with settlement fees, and according to PayPay Vice President COO Hajime Baba, “PayPay’s fee is about ton ton. Profit from additional services developed on the platform and loans from financial businesses. I just need to raise it. ”

Actually, according to the opinions of each company, the commission level of around 2% is almost the limit for business. In the case of code payment, there are often multiple balance charge routes such as deposit via bank account, carrier payment, and credit card. When charging from a credit card, the settlement company will be exempted from a few percent commission, so the 1.98% commission will be in the red.

The reason why the level of 1.98% can still be set is because there are other funding sources such as account deposit and carrier settlement routes, and even though it is charged, PayPay makes a whole lot of money. That’s not to say, there is a minimum level to avoid going into the red.

Even if there are stores that leave, most of those small and medium-sized affiliated stores, except for chain stores such as supermarkets, are thought to have “not used PayPay in the first place”. PayPay’s business impact is expected to remain at a very small level. If you stop handling at stores that used PayPay a lot, there is a possibility that customers will be separated, and the stores will be forced to make a decision by examining both.

As an industry impact, it can be said that PayPay’s announcement of fees has made it difficult to develop a financial business that relies on settlement fees. As mentioned above, each company is building a business with a delicate balance. Code payment, which does not require a dedicated device or network compared to credit cards, is said to be cost-effective, but it is already at the break-even point with a fee of around 3%, which is further lowered by around 2%. That level puts pressure on corporate performance.

This is expected to spread to fee negotiations with store-reading “CPM method” member stores, which have higher system usage costs than the MPM method, making monetization more difficult. To. The impact PayPay has had on the industry is that it has confirmed the fact that the payment business is no longer available. In the future, code payment operators that do not have synergies with peripheral businesses are likely to get stuck sooner or later.

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