A joint venture (JV) of SoftBank and Yahoo Japan is set to launch smartphone payment services called PayPay in Japan in the end of 2018.

The JV, called PayPay Corporation, was formed last month. The JV will also partner with Indian digital payment company Paytm to leverage its technological know-how in mobile payments.

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The new payment service will utilise barcodes (QR code) to enable mobile payments.

Currently, the cashless payment ratio to conventional methods is around 20% in Japan. The national government aims to increase the cashless payment ratio to 40% by 2025, and to 80% in the long-term.

The new payments service is expected to increase transaction convenience for consumers as well as for affiliated stores.

Following the launch, all the associated parties will work to increase the number of users by including the customer base of SoftBank as well as ‘Yahoo! Wallet’ that includes around 40 million accounts.

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Additionally, the PayPay platform will be integrated with Yahoo! JAPAN ID, enabling Yahoo! Wallet customers to utilise the new service within Yahoo! JAPAN’s smartphone app.

As the service will be in the user-oriented code-reading format, merchants are required to display the unique code that needs to be scanned to process payments.

The service, requiring minimal set-up, is expected to be cost-effective for merchants.