Latest news:

You are currently not logged in

Log in

Struggling Rakuten to combine credit card and mobile payments business

Japan’s Rakuten Group will fold its payments and points businesses into its credit card unit, it said on Thursday, a move that could set up the struggling e-commerce company to eventually list the card business.

Despite strong revenue from its core e-commerce offerings, Rakuten has lost money for 12 straight quarters, hit by the costly build-out of its mobile phone business, which has failed to gain traction in Japan.

It has turned to listing some of its units – including its popular internet banking business, Rakuten Bank, to generate cash.

The company said on Thursday it plans to consolidate its payments and points businesses and fold them into Rakuten Card, its credit card and loans unit.

Rakuten Card will become the “driving force” behind its integrated payments business and may form strategic partnerships with other companies as well as “raising its own capital as necessary”, Rakuten said in a statement.

Public broadcaster NHK earlier reported the plan to combine the businesses.

Points and payments are at the heart of Rakuten’s ecosystem, which is designed to draw customers into its broad spectrum of offerings. Users accumulate points by using Rakuten credit cards, shopping and insurance services. The points can be used to buy groceries, pay bills or book travel.

At its quarterly earnings briefing later on Thursday, Rakuten committed to taking on no additional gross debt, instead using equity-related financing to reduce its debt burden.

The group has a total $13.22 billion in debt, with $2.6 billion due in 2024 and a further $2.9 billion in 2025, according to Refinitiv data.

In the April-June period, Rakuten posted an operating loss of $340.13 million, narrowly better than expectations of a loss of $356 million, based on the average of six analysts polled by Refinitiv.

Losses at the mobile segment narrowed to $572.9 million on higher average revenue per user and increasing subscriptions. On Monday, Rakuten announced the departure of mobile chief executive Tareq Amin, who had headed the unit since March 2022

  • Reporting by Anton Bridge; Editing by Jamie Freed, David Dolan, Gerry Doyle and Raju Gopalakrishnan, of Reuters.
No Comments | Be the first to comment

Comment Manually

No comments