Japan’s Cashless Revolution: A New Era of Financial Innovation
The majority of Japan’s aging population still clings to cash, but the government is determined to change this trend. With cashless transactions accounting for only 39.3% of all spending in 2023, the government aims to reach 40% by 2025. To achieve this goal, innovative startups like SmartBank are stepping up to the challenge.
SmartBank: The Pioneer of Cashless Payments
Founded in 2019 by Shota Horii, Yuta Horii, and Jun Taketani, SmartBank offers an app and services that make switching to cashless payments seamless. The company’s founders, who previously sold their company Fablic to Rakuten in 2016, identified a significant problem in Japan’s consumer finance industry: many users were still relying on cash for everyday transactions. SmartBank’s solution is a prepaid card and finance management app that provides a deposit account, making it easy for individuals to manage their personal finances.
Targeting the Right Demographic
SmartBank’s primary target users are individuals in their 20s and 30s seeking to manage their personal finances, as well as married couples looking to manage their finances together. The company’s prepaid cards, including the B/43 My Card, B/43 Pair Card, and B/43 Junior Card, cater to these demographics. Notably, the B/43 Pair Card has become a popular choice for couples, as banks in Japan do not provide joint bank accounts.
Raising Capital for Growth
SmartBank has raised 4 billion JPY ($26 million) in funding, with 1.1 billion JPY ($7.2 million) coming from debt financing and 2.9 billion JPY ($18.8 million) from equity provided by Global Brain. This brings the company’s total funding to 5.93 billion JPY ($38.5M) in equity and 1.1 billion JPY in debt since its inception.
Expanding Services and Team
The new capital will be used to double the company’s workforce from 49 staff to around 100 employees by 2025, with half of the team dedicated to engineering. SmartBank has also expanded its user base and product offerings, introducing an AI receipt reading feature that transforms its app into an AI-driven financial advisor. This feature helps users better understand their finances, optimize financial activities, and make informed investment decisions.
A Comprehensive Financial Platform
SmartBank’s goal is to become a comprehensive financial platform, providing a wide range of financial services to users in the future. The company has obtained licenses for money transfers and prepaid payment instruments, enabling it to hold users’ deposits and offer services like payments and P2P transfers. By diversifying its revenue streams beyond interchange fees, SmartBank is poised to revolutionize Japan’s financial landscape.
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