Japan's largest credit card company, Rakuten Card, aims to nearly double its annual operating profit to 100 billion yen ($663.7 million) in the medium term, targeting the largely untapped business-to-business payments market, according to its new CEO, Koichi Nakamura.
Despite a declining population impacting demand in many sectors of the domestic economy, the credit card and payments markets are experiencing growth due to the digitalization of financial services in a landscape that was once heavily reliant on cash.
As part of Rakuten Group, an e-commerce and financial services conglomerate, Rakuten Card has successfully issued over 30 million credit cards and reported an operating profit of 62.1 billion yen in 2024, an increase of more than 20% from 2023.
Currently, credit card payments account for about one-third of consumer spending in Japan, yet less than 10 trillion yen of the 1,100 trillion yen total in business-to-business transactions is processed via credit cards. "It's really not a red ocean so it makes sense for us to enter the market without delay," Nakamura noted.
Rakuten Group maintains direct relationships with many small- and medium-sized enterprises that sell on its Ichiba e-commerce platform, allowing it to offer those businesses credit card services.
For larger corporations, where Rakuten has limited access, it plans to leverage the customer base of its business and capital alliance partner Mizuho Financial Group. Mizuho acquired a 14.99% stake in Rakuten Card last year and the two companies launched a joint credit card in December.
"This is not merely an investment in form. We are already collaborating on service creation and marketing," said Nakamura. Discussions about potential future partnerships are in the early stages and may involve packaging services such as payment settlement and processing.