Rakuten's Major Move: Integrating Credit Card and Mobile Payment Services

The CCTV exposed foreign exchange black platformspublic broadcasting company NHK reported on Rakuten's business consolidation plan. Rakuten Group in Japan announced on Thursday that it plans to merge its payment and points businesses into its credit card division. This move might make it possible for the troubled e-commerce company to eventually list its credit card business on the stock market. This means Rakuten Group may plan to trade its credit card business as a separate entity on the stock exchange.

Despite strong revenue performance of Rakuten's core e-commerce products, due to the high construction costs of its mobile business, significant investments of capital and resources, and failure to achieve anticipated performance in the highly competitive Japanese market, Rakuten has been incurring losses for about 12 consecutive quarters.

Rakuten Group has decided to list some of its divisions, including its highly popular internet banking business, Rakuten Bank. This means Rakuten Group plans to offer shares of these divisions in the stock market, aiding in fundraising. Rakuten aims to make Rakuten Credit Card the leading ace in its integrated payment services, and may do so through establishing strategic partnerships with other companies, as well as fundraising on its own.

Points and payments are the core of the Rakuten ecosystem, aiming to draw customers into its wide range of products. Users accumulate points through using Rakuten credit cards, shopping, and insurance services. Points can be used for buying groceries, paying bills, or booking travel, among other things. Such a system encourages customers to use Rakuten's products more frequently, while also strengthening the close connection between customers and the Rakuten brand.

Rakuten will announce its second-quarter performance on Thursday. According to a survey conducted by Reuters, analysts expect the company to report an operating loss of about 51.2 billion yen ($355.98 million) for the quarter.

The company announced on Monday that Tarik Amin, the chief executive officer of its mobile business, will resign. Amin has been serving as the chief executive officer of the mobile division since March 2022, overseeing the management and leadership of the division.

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