The public's phobia of touching cash amid COVID-19 could help SoftBank popularize mobile payments in cash-addicted Japan; SoftBank has invested $1B+ in PayPay
Masayoshi Son zeros in on Japan, where he is ready to lose billions in a battle to conquer cash Tweets: @nar , @_manish_sharma_ , @rishigautam2011 , @nar , @appurv_gupta , @nar , @haranikkei , @nar , @gearoidreidy , @vijayshekhar , @sharp_writing , and @nar Tweets: @nar : #SoftBank Group has made its latest billion-dollar technology bet on the assumption that the fear of touching money will drive people to embrace a payment app in the age of the coronavirus. #PayPay https://asia.nikkei.com/... Manish Sharma / @_manish_sharma_ : Absolutely! More power to the effort. 👏👏👏 🇮🇳 + 🇯🇵 = 🚀 https://twitter.com/... Mumbai Lawyer / @rishigautam2011 : A huge achievement for an Indian tech company! Congratulations @vijayshekhar. Hope to see @Paytm in Other parts of the world soon. https://twitter.com/... @nar : “If @masason's bet fails, it would be fuel for @SoftBank shareholders who want to rein him in. But if it succeeds, the rewards would be immense. [His] goal is to create the equivalent of Ant Group's Alipay in Japan.” https://asia.nikkei.com/... Appurv Gupta / @appurv_gupta : Gazab!! More power to you, Sir. https://twitter.com/... @nar : On top of a 10 billion yen giveaway campaign for its digital payment PayPay users, the SoftBank-backed app has decided that small businesses that join will pay no fees for 3 years. For SoftBank, cash burn is part of its DNA. https://asia.nikkei.com/... https://twitter.com/... @haranikkei : Big feature story of the week on @NAR: @masason zeros in on #Japan, where he is ready to lose billions in a battle to conquer cash — by @wata_suzu As of now, #SoftBank Group's stock price is falling again and down by 5% from yesterday's close https://asia.nikkei.com/... @nar : “Many people don't want to touch paper bills and coins that may have been touched by someone else,” the CEO of the SoftBank-created digital payment app #PayPay says. “Cashless is the way to enable touchless and contactless.” https://asia.nikkei.com/... Gearoid Reidy / @gearoidreidy : Speaking of QR codes, this is a great dive into @masason's attempts to dominate cashless payments in Japan by spending vast amounts of money to make PayPay the dominant competitor. QR codes are awful, but I will accept that they are superior to cash. https://asia.nikkei.com/... Vijay Shekhar Sharma / @vijayshekhar : Power of Softbank and Paytm coming together for Japanese market ! 🇮🇳 + 🇯🇵 = 🚀 https://twitter.com/... @sharp_writing : Great headline and artwork. And also a very informative story about Softbank's big bet on PayPay. By @wata_suzu SoftBank wants to burn money https://asia.nikkei.com/... @nar : SoftBank is gambling on Japan becoming a digital-pay power, pushing its #PayPay to wean a cash-addicted public off cash. Can Masayoshi Son make it the Alipay of Japan? https://asia.nikkei.com/... https://twitter.com/...
Context & Ripple Effects
Masayoshi Son's September 2020 wager was domestic and contrarian: SoftBank put over $1 billion into PayPay on the theory that COVID-era revulsion at touching banknotes would finally crack Japan's cash habit, with Son explicitly prepared to lose billions on subsidies that included a ¥10 billion user giveaway and a three-year merchant fee waiver.
The corpus shows the bet compounding rather than dying: by late 2023 PayPay held a two-thirds share of Japan's QR-code payments market and surfaced as a candidate in SoftBank's IPO pipeline, and by February 2026 it had filed for a US IPO reporting a $675.47M profit on roughly $1.82B of nine-month revenue in its filing disclosures.
First-order effects
- Japanese consumers and small merchants got paid to switch: the giveaway plus the fee waiver dropped the cost of going cashless to zero on both sides of the transaction, directly attacking the cash register, not just the wallet.
- Every rival QR-code operator in Japan faced a subsidy war against a backer signaling unlimited tolerance for losses.
Second-order effects
- With merchant fees waived for three years, PayPay bought terminal placement at small retailers ahead of pricing competition, converting a marketing spend into locked-in distribution.
- The playbook echoed what Paytm and Google had pursued in India, where wallet transaction value jumped 64% in the year after December 2016 and incumbents treated low digital-payment penetration as an opening — validating subsidy-first entry into cash-heavy markets.
Third-order effects
- If the pattern holds, loss-leader payments become a standalone asset class: subsidy-funded share leadership matures into profitability and public-market exit, as PayPay's path from SoftBank's balance sheet to a US IPO filing demonstrates.
- For cash-dominant economies, the structural lesson is that adoption hinges less on consumer preference than on who can fund the transition longest — concentrating payment rails under whichever conglomerate outlasts the burn.
The trend: Subsidy-funded payment apps are converting cash-addicted economies, with the deepest-pocketed sponsor's share leader graduating from private bets to public markets.