Prospectus Summary
PROSPECTUS SUMMARY This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary may not contain all of the information that you should consider before investing in the ADSs. You should carefully read the entire prospectus, including “Risk Factors” and the financial statements, before making an investment decision.Who We Are
As Japan’s leading financial technology company, we are dedicated to our goal of becoming a digital finance platform for all. We strive to empower the everyday lives of users and businesses by transforming their smartphones into a comprehensive, easy-to-use, and accessible financial platform that centralizes and simplifies numerous daily activities for ultimate convenience. Through a seamless ecosystem of payment, financial and everyday services, we have served as a game-changer in driving the shift to a cashless and digitally empowered economy. Through continued innovation, we aim to redefine how millions of individuals and businesses in Japan engage with finance throughout their daily activities.
We operate a highly scalable and integrated digital finance platform that serves as an all-in-one solution for users and merchants, built on a robust two-sided network connecting tens of millions of users and millions of merchants. Our platform facilitates a shared ecosystem across payments and financial services. As a clear leader in Japan’s cashless payment market, we offer one of the most comprehensive and versatile service suites in the market, spanning daily payments, banking, credit, investments, and beyond.
Our story started with our code-based cashless payments solution. We launched this service in October 2018 and it rapidly expanded to become a nation-wide leading cashless payments ecosystem that had approximately 72 million PayPay registered users as of December 31, 2025, representing a penetration of 75% among 96 million smartphone users in Japan1. With the acquisition of PayPay Card Corporation in October 2022, our platform evolved to a next-generation payments ecosystem, seamlessly integrating our code-based payment and credit card payment services through our PayPay app. We recorded Payment Segment GMV of ¥15.39 trillion based on transactions processed through our products, PayPay Balance, PayPay Credit and PayPay Card, for the year ended March 31, 2025, and we have consistently achieved over 20% annual GMV growth since the fiscal year ended March 31, 2019. Our payment service is deeply integrated in the daily lives of our users, supporting a broad range of transaction scenarios and thereby driving high user engagement. In addition, we have supported merchants through promotional tools such as PayPay Coupons, PayPay Stamp Cards and PayPay Funding solutions designed to enhance retail productivity.
We further expanded our platform to core financial services. We acquired majority voting rights in PayPay Bank Corporation and PayPay Securities Corporation in April 2025, gaining comprehensive capabilities to provide a broad range of financial services offerings, to become a convenient one-stop financial portal destination for all users. Our offerings include internet banking and lending services through PayPay Bank Corporation and smartphone-based securities brokerage and investment services through PayPay Securities Corporation along with additional value-added services for our users.
Overview
We offer a digital finance platform with services that range from easy-to-use payments services to a full-suite of financial services, designed to simplify and enrich the everyday lives of consumers and businesses in Japan. Payments services contribute to broad-based user engagement through transaction frequency, while financial services deepen and accelerate user engagement through cross-selling and long-term product relationships. Together, they function as mutually reinforcing pillars of our ecosystem and form the foundation of our user engagement strategy.
Payment business. Our payment business is anchored by PayPay, Japan’s leading code-based mobile payment platform, and PayPay Card, our integrated credit card service. Since its launch in 2018, PayPay has become one of the most widely used digital wallets in Japan, with approximately 72 million PayPay registered users as of December 31, 2025, and approximately 40 million MTUs during December 2025. PayPay allows users to make fast, secure payments by simply scanning a code with their smartphone, while offering merchants a low-cost, easy-to-adopt digital payment solution. Our users can charge their PayPay Balance via several methods and make payments from that pre-loaded balance or utilize PayPay Credit to leverage credit extended to them by PayPay, if approved for PayPay Card credit. PayPay Card Corporation, through its more traditional credit card offerings, also offers revolving credit, cash advances, and installment plans for eligible card holders. PayPay Card had 16.0 million active cards issued as of December 31, 2025. Together, we recorded Payment Segment GMV of ¥15.39 trillion based on transactions processed through PayPay Balance, PayPay Credit and PayPay Card for the year ended March 31, 2025, reinforcing our dominant position in Japan’s code-based payments market. These services support a broad range of daily transactions—both offline and online—and form the foundation of our efforts to further deepen user engagement and expand monetization across our ecosystem.
Financial service business. Our financial service business, anchored by PayPay Bank Corporation and PayPay Securities Corporation, complements our payment platform by offering seamless, app-based banking and investing services. PayPay Bank services are integrated into the PayPay ecosystem and, as of December 31, 2025, had 9.7 million accounts with a total of ¥2,281.9 billion in deposits and ¥1,098.3 billion in loan balances, including card loans, business loans and mortgages. PayPay Securities Corporation, with its standalone app in addition to also being embedded in the PayPay app, reached 1.54 million brokerage accounts as of December 31, 2025, and serves a broad base of primarily first-time investors through user-friendly features. Our strategy in financial services is to further deepen integration with PayPay—recently exemplified by PayPay acquiring majority stakes in both PayPay Bank Corporation and PayPay Securities Corporation in April 2025—to create a unified digital finance platform where users can effortlessly manage spending, saving, borrowing and investing all within a single mobile experience.
As we have expanded the use cases and frequency of payment transactions, our payment business has not only scaled with user growth, but also contributed meaningfully to overall profitability. In parallel, we have expanded our revenue mix by deepening financial engagement with existing users, leveraging cross-selling between our payment and financial service businesses to increase average revenue per user and improve platform monetization. This deliberate expansion of revenue streams alongside our product ecosystem has enabled us to simultaneously grow revenue and expand margins, which we believe is unique and differentiating across the broader global fintech landscape.
As we expand our service offerings and grow our business, it is important to continue maintaining constructive and transparent relationships with the regulatory authorities that supervise our business. The scope and pace of our license acquisitions underscore the depth of our regulatory engagement and serve as further validation of our role in advancing national policy objectives, particularly the Japanese government’s goal of accelerating adoption of digital and cashless payments across the broader Japanese population. To date, we have expanded our business steadily and strategically through the acquisition of a comprehensive set of regulatory licenses, reflecting both our long-term commitment to compliance and the government’s support for Japan’s transition to a more digital and fintech-enabled financial ecosystem. We have obtained 13 licenses across payment and financial business domains, including licenses for banking, securities brokerage, credit card operations and funds transfer, enabling us to offer a broad range of regulated financial services directly through our platform.
As a result, for the year ended March 31, 2025, we generated total revenue of ¥299.1 billion, representing a two-year CAGR of 22%, and operating profit of ¥35.5 billion (representing a 12% operating profit margin). We transitioned from loss to profitability over the past three fiscal years, achieving profit for the year of ¥39.2 billion (representing a profit for the year margin of 13%) and Adjusted EBITDA of ¥58.7 billion (representing an Adjusted EBITDA Margin of 20%) for the year ended March 31, 2025. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-IFRS Financial Measures” for a discussion of Adjusted EBITDA and Adjusted EBITDA Margin, and a reconciliation of these figures from profit (loss) for the year. These results illustrate our strong operating leverage and the scalability of our platform as monetization accelerates. As of December 31, 2025, borrowings on our consolidated statement of financial position were ¥568,309 million (including ¥351,325 million of borrowings in the Payment segment mainly related to PayPay Card Corporation’s credit card business operations).
Our Presence and Track Record
Japan has historically been a cash-centric economy, with cash comprising approximately ¥182 trillion of domestic household final consumption payment out of ¥247 trillion (or 70.2%) in 2018 calculated based on statistics released by the Ministry of Economy, Trade and Industry, or the METI, on March 31, 2025, and METI’s revised calculation of Japan’s cashless penetration rate as of January 1, 2026 driven in part by structural factors such as high merchant onboarding costs and high transaction fees that limited the adoption of digital payments. Additionally, it reported that the ratio of cashless payments in Japan reached 51.7%2 in 2024, based on statistics released on December 19, 2025.
To address the abovementioned untapped opportunity, PayPay entered the market by waiving transaction fees for up to three years (and then charging transaction fees in later years) for small and medium-sized merchants, combined with low installation and operational costs. Unlike traditional credit card networks, we operate our own merchant network, enabling us to set fee levels independently and avoid third-party acquirer or network charges. This structural difference underpins our ability to provide services at lower cost. These measures expanded merchant participation and ease-of-use for users, reinforcing the expansion of our two-sided network. As more merchants began to accept PayPay, the overall value proposition for users strengthened, leading to increased user engagement and broader ecosystem participation. As a result, PayPay emerged as a leading force in Japan’s cashless transformation, achieving an extraordinary CAGR of 65% in transaction volume over the period from the year ended March 31, 2020 to the year ended March 31, 2025, reaching a Payment Segment GMV of ¥15.39 trillion based on transactions through PayPay Balance, PayPay Credit and PayPay Card for the year ended March 31, 2025.
We are distinguished by our ability to scale rapidly, serve a demographically broad user base, and sustain strong profitability. Although we had recorded loss for the year every year since our inception through the year ended March 31, 2024 due to our strict focus on the scaling of our business, we transitioned from loss to profitability starting from the year ended March 31, 2025. Our ecosystem now extends beyond payments into banking and investments, which led to a seamless integration of services through the PayPay app. Our regulated financial services reached 9.7 million bank accounts and over 20 million users for PayPay Point investment service as of
December 31, 2025. These achievements not only reflect our ability to scale digital finance infrastructure across both user and merchant touchpoints, but also underscore our track record of execution and continued leadership in driving Japan’s digital financial transformation. By bringing PayPay Bank Corporation and PayPay Securities Corporation into our group, we are now positioned to execute a fully integrated cross-selling strategy from payments to financial services, advancing our broader mission of accelerating digital finance adoption across Japan.
Market Opportunity
Japan represents a vast and rapidly evolving opportunity across our core businesses—payments, banking, and securities brokerage—as consumer behavior shifts toward digital solutions. Despite recent progress, the Japanese economy remains mainly cash-centric. Japan’s consumer payments market represents a substantial and under-penetrated opportunity, with continued growth expected as digital adoption accelerates. Japan’s consumer payments market represents a substantial and under-penetrated opportunity, with continued growth expected as digital adoption accelerates. In 2024, Japan’s household final consumption expenditure excluding imputed rent totaled approximately ¥273 trillion (equivalent to US$1.8 trillion) according to the METI as reported in “Summary of the Cashless Promotion Study Group” released on December 26, 2025, forming the total addressable market for consumer expenditure. Of this amount, cashless payment volume reached ¥141 trillion (equivalent to US$0.9 trillion) in the same year, according to the same report, which represented a cashless penetration rate of 51.7%3, up from ¥74 trillion (equivalent to US$0.5 trillion) in 2018, or a cashless penetration rate of approximately 29.8%, reflecting a CAGR of 11.5% during the period from 2018 to 2024.
Growth has been particularly strong in mobile-first formats: of the overall cashless payment amount, code-based payments grew at a CAGR of 75% over the period from 2019 to 2024, while debit cards, credit cards and E-money expanded at CAGRs of 21%, 9% and 1%, respectively, over the same period, according to the METI as reported in the “Calculation of Cashless Payment Ratio for 2024” released on March 31, 2025 and the Cashless Promotion Council as reported in the “Survey on Code-Based Payment Usage Trends” released on March 14, 2025 (transactions made using credit cards via code are classified under “code-based payments” and are excluded from the general “credit card” category). Within this growing market, PayPay has emerged as the leading player, with a GMV CAGR of 76% over the period from 2019 to 2024. We captured approximately one-quarter of the overall incremental cashless payment volume in Japan from 2023 to 2024, which was approximately ¥2.7 trillion of approximately ¥14.3 trillion in growth. Based on information reported by industry associations, of the approximately 38.8 billion cashless transactions completed in Japan in 2024, we accounted for 20% of the total. The total transaction figure was calculated based on the following data: (i) credit card transactions reported by 26 credit card companies in a survey by the Japan Credit Association, (ii) debit card and electronic money transactions from 1,069 debit card companies and eight electronic money companies as released by the Bank of Japan and (iii) code-based payment transactions from 13 code-based payment companies, as reported by the Payments Japan Association. In the code-based payment market, we held 64% of GMV as of March 14, 2025, as reported by the Cashless Promotion Council in the Survey on Code-Based Payment Usage Trends.
The Japanese government has introduced multiple policy initiatives to promote digital finance adoption. For example, in January 2026 the Japanese government reiterated its long-term national vision of achieving 80% total cashless penetration, as well as its 65% benchmark goal by the end of 2030, both of which represent considerable increases from Japan’s 51.7%3 cashless penetration as of the end of 2024. We have not only benefited from the cashless transition—we have played a foundational role in creating and expanding Japan’s digital payments ecosystem. We have aligned our strategy with public-sector efforts such as merchant subsidy programs and government-led campaigns to expand the use of mobile payments.
Structural inefficiencies persist not only in payments, but also across the banking and securities sectors. There is meaningful opportunity for digital platforms to scale within still-offline financial verticals, which reflects a broader macro shift toward digitalization—a trend we have successfully leveraged to capture significant shares in multiple markets and which provides a deep, multi-year runway for continued expansion.
In parallel, Japan is also undergoing a national shift “from savings to investment.” This is being reinforced by the government’s expansion of the Nippon Individual Savings Account, or NISA, program, a Japanese government tax-free stock investment program for individuals, which has contributed to record growth in individual investment account openings. We believe these developments will continue to support the growth of digital brokerage and asset management services.
Taken together, these macroeconomic, structural and policy trends indicate continued long-term growth potential for Japan’s digital financial markets and support our expectations for the future development of our platform.
Our Competitive Advantages
Unique, Comprehensive Digital Finance Platform Powered by a Two-Sided Network
We operate a highly scalable, integrated digital finance platform that acts as an all-in-one solution for users and merchants, utilizing a robust two-sided network connecting tens of millions of users and millions of merchants. Our platform facilitates a unified ecosystem across payments and financial services. As a clear leader in Japan’s cashless payment market, we offer one of the most comprehensive and versatile service suites in the market, spanning daily payments, banking, credit, investments, and beyond.
The foundation of our platform is the payment service, which enables deep engagement with users and merchants through network effects. As our user base expands and usage grows, it strengthens the incentive for additional merchants to adopt PayPay, further accelerating merchant acquisition. In turn, as more merchants adopt PayPay, the number of payment-acceptance locations increases, users benefit from greater convenience, driving increased usage. This mutually reinforcing dynamic between user activity and merchant participation is at the core of our two-sided network model, enabling us to scale rapidly across both sides of the platform and deepen engagement across the ecosystem. In addition, because we operate our own merchant network, we are able to process payments without relying on traditional third-party payment processors, external acquirers or brand / network providers, allowing us to retain a greater share of payment economics and minimize settlement outflows.
Our strong network effects have also driven the expansion of our financial services offerings. Greater engagement with our payment service creates natural opportunities to promote our internet banking and securities brokerage services, facilitating more efficient user acquisition. The growth of our financial services offerings generates cross-service synergies—users who adopt both payment and financial services exhibit higher average payment volume per user and stronger long-term engagement. This synergy forms a powerful feedback loop: active payment users serve as a springboard for financial product adoption, while financial services users tend to transact more payment volume. Our loyal users who also adopt financial services tend to be more engaged and may enter into transactions more frequently with higher amounts.
As our ecosystem has scaled and diversified to satisfy various financial needs of users and merchants, we can serve as a one-stop digital financial platform and create an integrated system of money circulation. This integrated approach to digital finance along with PayPay’s two-sided network is unique even when compared to other cashless payment providers, positioning us as both an enabler and beneficiary of Japan’s accelerating shift toward a digital finance economy.
Strong Value Propositions to Users and Merchants
We offer a comprehensive value proposition that meets the evolving needs of both users and merchants in Japan’s rapidly digitizing financial environment. For users, our platform delivers a seamless and intuitive experience built around smartphone-based payments, combining the ease of code-based and credit card transactions with compelling promotional incentives such as PayPay Points. These features not only facilitate everyday payments—from retail to transportation to utility bills—but also drive recurring engagement and higher transaction frequency. All services are accessible through a single mobile application that integrates payments, transfers, credit, and banking, providing users with a unified and convenient financial experience. Our user centric model allows us to weave our services into users’ daily life and capture non-discretionary spending in a near-ubiquitous variety of use cases, capturing offline and online payments, bill payments and P2P transfers, unlike traditional cashless players which we believe may have more limited touchpoints and focus on high-value transactions, which may constrain their ability to gather user data and expand into non-payment services.
For merchants, we provide a compelling value proposition centered on low-friction adoption and high-impact tools for business growth. Onboarding is fast and cost-efficient, with no upfront installation fees and competitively priced payment service charges level. Unlike many companies that rely on third-party networks to operate two-sided models, we maintain a highly self-contained value chain, conducting transactions directly with merchants. This structure minimizes external intermediary fees and enables us to offer lower transaction fee rates than issuer peers. We also support merchants with integrated digital marketing functions—such as in-app coupons, promotions, and loyalty programs—designed to increase visibility and encourage user spending. Additional solutions like PayPay for Business (our merchant-facing platform that provides onboarding, sales tracking and marketing campaign tools) streamlined settlement and reporting features, and actionable data analytics further enable merchants to improve operational efficiency and optimize performance.
Our broad merchant coverage, spanning both physical retailers and an expanding network of online businesses, complements our user proposition and reinforces the utility of our platform across daily life. By creating a trusted, feature-rich environment that enhances convenience for users and lowers barriers for merchants, we have established a strong foundation for continued engagement, high transaction throughput, and long-term monetization.