Mobile services cloud company Infobip has launched ¥Coins (pronounced Yen Coins), a virtual currency for Japanese mobile users. The online tokens are intended to help international companies break into a market that is often described as “insular” by serving as a mobile payments gateway.
Japan is a potentially lucrative growth market for app developers. As of September, smartphone penetration was 41.7%, a number that is expected to jump to 60.2% in 2014, according to eMarketer. Apple’s iOS currently has a slightly bigger market share than Android, at 49.2% versus 45.8% of sales.
But despite the rapid adoption of smartphones, there are many hurdles for international companies that want to enter Japan. ¥Coins seek to help developers overcome those challenges by serving as a turnkey solution for international companies.
Due to market requirements and commercial law, a local business presence (such as a representative office or subsidiary company) is required in order to start a paid content service. Infobip’s local entity in Japan allows foreign developers to overcome regulatory hurdles. Infobip claims it is the first international payments provider to offer virtual currency to companies without a presence in Japan.
“There are other payment options in Japan, but they are typically limited to Japanese companies operating within Japan,” says Paolo Rizzardini, Infobip’s vice president of mobile payments. “Our challenge was to open that market for international companies that want to monetize in Japan.”
Many Japanese consumers still use featurephones, and their access to content is heavily controlled by mobile operators. As more people purchase smartphones and gain access to app stores, however, that lessens the power of carriers and gives mobile users more options.
Japanese mobile users will be able to purchase ¥Coins through direct operator billing, top-up scratch cards sold in brick-and-mortar stores or online with credit cards. Infobip plans to gain traction for the virtual currency by offering special deals for consumers (it has already announced developer partnerships with Top Eleven, a popular virtual soccer club, and online media affiliate network MGCash). In addition to ¥Coins, Infobip will also offer localization and marketing consulting to help international companies tackle the significant challenge of competing against well-established local players.
“Companies are not just looking for a payments provider or a payments gateway. They are also looking for expertise,” says Rizzardini.
He adds that in the long-term, Infobip also hopes to hold promotions with mobile carriers. For example, NTT DOCOMO could potentially promote a game with exclusive offers for ¥Coins users.
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