Japan’s banking holding company Mizuho Financial Group (Mizuho FG) has agreed to acquire a 14.99% stake in Rakuten Card from Rakuten Group in a deal worth approximately JPY165bn ($1.06bn).
This deal comes as part of a collaboration between Mizuho FG, Mizuho Bank, UC Card, Orient Corporation, Rakuten Group and Rakuten Card in a move to advance Japan’s digital payments landscape.
Under the terms of the share transfer agreement and shareholders agreement, Rakuten Card will continue to operate as a subsidiary of Rakuten Group within the larger Rakuten ecosystem.
The latest agreement builds on the expanded strategic capital and business alliance between Mizuho Securities and Rakuten Securities, announced in November last year.
Mizuho and Rakuten Group have been working together to create new retail business models in asset building and asset management, merging their financial expertise and fintech capabilities.
Through the partnership, both parties will introduce a new co-branded credit card for retail customers, expected to launch in December. The card will allow users to earn Rakuten Points and provide benefits such as reduced ATM fees.
The partnership also includes plans to introduce a digital instalment payment option on Rakuten Ichiba, allowing users to apply for immediate approval and reuse the service as needed.
For corporate clients, Mizuho FG and Rakuten Group aim to simplify payment operations and digitalise settlement processes for Rakuten Card’s extensive network of affiliate stores, which includes around 900,000 businesses.
According to Rakuten, the sale of its stake in Rakuten Card is expected to generate a special profit of JPY159.35bn ($1.02bn) at the unconsolidated level for the financial year ending December.
Rakuten Card, UC Card, and Orient will collaborate on streamlining credit card business operations, which is expected to increase efficiency across their services.
Besides Mizuho FG companies and Rakuten Group companies, will work together to streamline back-office tasks within their credit card operations.
The companies also intend to tackle the growing issue of credit card fraud, sharing insights on fraud tactics and prevention strategies to contribute to industry-wide security improvements.
Share transfer of Rakuten Card to Mizuho FG is planned for 1 December 2024.
