What the launch of the largest Japanese payment system in Ukraine can bring?

The Japanese JCB payment system plans to launch Ukraine: the largest in Japan and the third largest in the world. This was recently announced by the National Bank of Ukraine. Takashi Suetsugu himself, general manager of JCB, spoke about his interest in such a decision. The head of the NBU, Iakiv Smoliy welcomed the intention of the Japanese side. In other words, everything is clear as the summer sky. Let’s try to figure out, what this will bring to Ukrainian business, and why it’s beneficial for Japan and how Ukrainian fintech companies should respond.

JCB and Ukraine

JCB is one of the five largest global payment systems in the world by issued cards and the number of transactions for payment for goods and services. At the end of 2017, 117 million people were JCB cardholders — this is almost equal to the population of Japan. At the same time, JCB cards are serviced in 190 countries, and JCB payment cards are issued in 23 countries.

JCB has been operating in the financial market for 57 years, and the company became the leader in issuing credit cards back in 1968. Already in the 1980s, company became one of the world leaders.

The main services are, of course, operations with bank accounts, as well as booking hotels and tickets, payment for services and purchases on the Internet in almost any country in the world.

But the main feature of JCB — PS gives privileges to Japanese, Chinese and Korean tourists in EU countries and in the USA. They can use the JCB PlazaWeb guide to find interesting deals in the country where they are going. Asian customers also have access to pleasant trivia in the form of free internet at airports. In addition, JCB gives discounts on tours to Japan to its own customers, as well as a 10 percent discount on visa.

JCB loyalty programs, if it enters the Ukrainian market, will help attract tourists from China, Japan and South Korea to our country — and this is a huge & unexplored sector for Ukraine. And Ukrainian JCB customers, in turn, will receive a discount on the traditionally expensive travel to Japan. If you add it up with bonuses/discounts from, for e.g., Turkish Airlines, it will become available for larger segment of tourists.

I will not turn myself into a travel blogger (such is a pity) — we’ll better discuss the business interest of JCB on Ukrainian market. Firstly, the emergence of another global payment system will also force Ukrainian market leaders to strain themselves in order not to lose in the competition. In case JCB decides to issue co-badge cards from one of the PS operating in Ukraine. Ukrainians will gain access to all the privileges available for JCB card holders. Definitely, we should expect the launch of the Prostir domestic payment system, as well as integration with Mastercard’s deep infrastructure capabilities, such as payment for public transport and loyalty programs.

Secondly, JCB is making a tactical move by entering Ukraine — this way Japan can win some points from PayPal — as we know, their plans in Ukraine is more and more like a lingering soap opera. Read more about this in the comments for ua.news. Let me remind you: PayPal considers Ukraine to be a “non-priority region”, unlike Google Pay and Android Pay, which greatly exceeded the expected KPI for launching with us.

Third, not so long ago, I pointed on the motivation of China Union Pay to start working in Ukraine. In addition to general plans for development in Eastern Europe, it includes the element of traditional economic rivalry between China and Japan.

Why JCB need Ukraine?

Our country is a millions of people who are ready to use all global services. Just look at our PayPass-friendly shops or subway stations — we have been referred to by the already mentioned Google Pay and Android Pay, or have a look at the Uber statistics.

Thus, over the year, the number of contactless transactions in Ukraine increased 68 times, primarily due to the usage simplification of mobile wallets. And the number of devices connected to contactless payments is growing by 25% monthly. Yeah, I’,m not tired of talking about it, really. Plus, the stabilization of the Ukrainian currency market signals to foreign companies that it is worth coming here and developing new products.

In other words, the potentially Ukrainian market for JCB is tens of millions of active users willing to spend money and try out new technologies. At the same time, JCB management needs to be ready for the months of waiting for the launch of the payment infrastructure in Ukraine, as well as the fact the market is already divided between Mastercard and Visa with its own loyal users. Fortunately, JCB has a wealth of experience in entering new markets.

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CEO of the international payment system LEO, the shareholder of IBOX Bank

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Alyona Shevtsova (Degrik)

Alyona Shevtsova (Degrik)

CEO of the international payment system LEO, the shareholder of IBOX Bank

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