Japan's struggling Rakuten to combine credit card and mobile payments business (updated)

Rakuten Bank

10/08/2023 05:34

(Recasts with company statement, adds details)
       TOKYO, Aug 10 (Reuters) - Japan's Rakuten Group  4755.T 
will fold its payments and points businesses into its credit
card unit, it said on Thursday, a move that could set the
struggling e-commerce company up to eventually list the card
business.
        Despite strong revenue from its core e-commerce
offerings, Rakuten has lost money for about 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  5838.T  -
to generate cash. 
  
        The company said on Thursday it plans to consolidate its
payments and points businesses and fold them into Rakuten Card,
it 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.
  
        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.
  
        Public broadcaster NHK earlier reported the plan to
combine the businesses.
  
    Rakuten will announce its second-quarter results on
Thursday, with analysts expecting an operating loss of 51.2
billion yen ($355.98 million), based on the average of six
analysts polled by Refinitiv.
        On Monday it announced the departure of Tareq Amin,
chief executive of the mobile business, who had headed the unit
since March 2022.
  
        ($1 = 143.8300 yen)

 (Reporting by Anton Bridge; Editing by Jamie Freed, David Dolan
and Gerry Doyle)
 ((Anton.Bridge@thomsonreuters.com;))