Rakuten Card Aiming For 100 Billion Yen Profit, Eyes 1,100 Trillion Yen B2B Market

Japan's leading credit card firm, Rakuten Card, is targeting nearly a twofold increase in its yearly operating profit to 100 billion yen ($663.7 million) in the medium term, and perceives a chance to grow in the mostly unexploited business-to-business payments sector, according to its new CEO. Though Japan's declining population is impacting demand across much of the domestic market, the credit card and payment sectors are experiencing rare growth due to the surge in the digitalisation of financial services in what was previously a cash-driven economy.

Rakuten Card, available exclusively through online applications and a member of Rakuten Group (4755.T), opens new tab - a conglomerate in e-commerce and financial services - has capitalized on this trend to issue over 30 million credit cards thus far and reported an operating profit of 62.1 billion yen in 2024, reflecting an increase of over 20% per cent compared to 2023. Although credit card payments currently account for about one-third of consumer expenditure in Japan, fewer than 10 trillion yen of the overall 1,100 trillion yen in business-to-business transactions are conducted via credit card, stated Rakuten Card CEO Koichi Nakamura in a Reuters interview. 

"Nakamura stated, 'It's truly not a competitive arena, so it makes sense for us to enter the market promptly.'' Rakuten has direct interactions with numerous small and medium enterprises that sell on its Ichiba e-commerce site, allowing it to provide credit card services.

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For bigger corporations, where Rakuten's influence is restricted, it aims to access the customer base of its business and capital alliance partner Mizuho Financial Group (8411.T), Nakamura stated. Last year, Mizuho purchased 14.99% of Rakuten Card's shares, and the two introduced a joint credit card in December. "It’s not just an investment in appearance. 'We are already collaborating on services and conducting marketing together'," Nakamura stated.

Meanwhile, conversations about potential services for collaboration between the two are in the initial phase but could involve bundling services such as payment processing and settlement, Nakamura mentioned.

($1 = 150.6700 yen)