Japanese messaging app firm LINE Corp. is raising around 148.1 billion yen (US$1.33 billion) through convertible bonds to fund its aggressive expansion into the financial services business, Reuters reports.
The fresh capital raised by the zero coupon convertible bonds, maturing in 2023 and 2025, will be used to promote the popular chat app operator’s mobile payments platform LINE Pay and develop infrastructure to offer a wider range of financial services by end-2021.
The company will boost the number of locations and merchants accepting LINE Pay as a payment option, the number of LINE Pay user accounts, as well as the volumes of money transfers through the mobile payment service.
Launched in 2014, the mobile payment service supports peer-to-peer payments between users of the platform, and allows users to make payments through the app at affiliated online and offline stores by registering their credit cards.
Transaction volume surged 83 percent to 195 billion yen in the second quarter from a year earlier, according to the company.
In 2017, LINE Pay registered 10 million new users in the first quarter, and this increased to 40 million in the last quarter.Global annual transaction volume exceeded 450 billion yen.
Amid the booming mobile payment services in the region in recent years, both tech giants and startups have been entering the fray, with Chinese players AliPay and WeChat Pay aggressively expanding to overseas markets like Southeast Asia and Japan.
In June LINE unveiled a three-year plan to accelerate the popularization of code payments. One of its initiatives is the launch of LINE Pay for Merchants app, which is specifically designed for QR-code payments on LINE Pay, targeting small and mid-sized merchants. Transaction surcharges will be waived for the first three years.
Leveraging on its massive user base, LINE is ramping up its efforts to develop a series of app-based financial services. It has partnered with Nomura, Japan’s largest financial broker, to set up an internet-focused securities brokerage.
Earlier this year, LINE also set up a Singapore-based cryptocurrency exchange BITBOX, while having applied for a license to establish a cryptocurrency exchange in Japan.
In late August, the company launched its first cryptocurrency “LINK” with its own blockchain network “LINK Chain” to power it. This is aside from its existing virtual currency for in-app content and services.
The crypto token, which was not issued via an initial coin offering, can be used to buy content like LINE stickers and webcomics, as well as other Line services.
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