Mitsubishi UFJ Financial GroupMizuho Financial Group and Sumitomo Mitsui Financial Group, three of the largest Japanese banks, have teamed up to launch a standardised smartphone payment system using QR codes.

The three banks will lay out the plans to unify QR code specifications across participating banks throughout this month, but the rollout of the systems is set in 2019. This move is part of an effort to promote cashless transactions in the country, which are already quite popular in China.

The three banks will establish a jointly financed company to oversee the system, which can be joined by other banks in the region.

The aim of this projects is to streamline bank operations with cashless operations, while lowering the costs for retail outlets using these QR codes.

Japan is currently working in its e-payment infrastructure, which currently lags behind compared to neighbouring countries – even if the cost of doing so is using QR codes.

Read more: Japanese SBI Group delays cryptocurrency exchange to beef up security

According to the Boston Consulting Group, 65% of payments in Japan are settled with cash, double the average for developed nations. Credit cards are used in less than 20% of settlements.

Messaging app Line, in partnership with NTT Docomo, will launch a QR-based system in April, Line Pay.

On the other hand, Bank of Japan that 98% of payments in Chinese urban areas are done on mobile, mostly through AliPay’s QR-based payment system.

Related: Japanese banks under siege from reworked Ursnif malware

by Henry Vilar
Henry is Junior Reporter at IBS Intelligence, follow him on Twitter or contact him at: henryv@ibsintelligence.com
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