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SoftBank Group Firm PayPay Securities Aims to Double Accounts

(Bloomberg) — PayPay Securities Corp. aims to double the number of its brokerage accounts to 2 million by the end of this fiscal year through March from about 1 million now, backed by users of the group’s cashless payment system, according to its chief executive officer.

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The Tokyo-based company’s top shareholder operates PayPay app, which had about 60 million registered users as of October, and investors are able to conduct brokerage transactions on the payment app. PayPay Securities expects the convenience of that set-up to boost the number of its users, said CEO Kenji Bansho in an interview.

PayPay Securities needs to increase its users and the amount of assets they invest in to meet its goal of becoming profitable in the next few years. The company has been in the red since it opened for business in February 2021, and it posted a net loss of ¥4.6 billion ($29 million) in the fiscal year ended March 31, 2023, according to its latest disclosure document.

The company’s biggest shareholder, PayPay Corp., is a subsidiary of SoftBank Corp. founded by billionaire Masayoshi Son. PayPay Securities has already seen its accounts double in a year to about 1 million as of March. And the start of tax-exempt savings accounts known as NISA this year has accelerated the opening of accounts by retail investors in Japan.

But it’s a crowded field, even without the country’s big bank-backed brokerages. PayPay Securities ranks No. 6 for online brokerage accounts as of March, trailing No. 1 firm SBI Group including SBI Securities Co. with 12.5 million accounts and Rakuten Securities Inc. with 10.9 million. Nomura Holdings Inc., Daiwa Securities Group Inc. and units of Japan’s largest banks dominate the traditional brokerage arena.

PayPay Securities will likely exceed 2 million accounts and “it will continue to grow at a considerable pace,” said Bloomberg Intelligence analyst Hideyasu Ban. But it will take time for the firm to break even because of the small amount of investments per customer, and it’s important for the company to make efforts to boost that figure, he said.

–With assistance from Ichiro Suzuki.

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