Mizuho Financial Group acquires 14.99% of Rakuten Card

As previously announced on October 1, 2024, Rakuten Card and Mizuho Financial Group have agreed to enter into a strategic capital and business alliance between the two companies. In conjunction with this Alliance, Rakuten Group and Mizuho FG concluded a share transfer agreement, with Rakuten transferring 14.99% of Rakuten Card’s common stock to Mizuho FG.

In connection with this transaction, Rakuten Group will record a special profit of JPY 159bn from the gain on the sale of affiliated companies in its non-consolidated financial statements for the fiscal year ending December 2024. As Rakuten Card will remain a consolidated subsidiary of the Company even after this agreement is concluded, there will be no material impact on the company’s consolidated financial results.

In addition, Rakuten Group, Rakuten Card, Mizuho Financial Group, Mizuho Bank, UC Card and Orient Corporation (Orico) formed a business alliance that aims to transform Japan’s digital payment landscape.

Background and significance of this alliance

Since the “Announcement Regarding Conclusion of Strategic Capital and Business Alliance between Rakuten Securities Holdings and Mizuho Securities” on October 7, 2022 and the “Announcement Regarding Strengthening of Strategic Capital and Business Alliance between Rakuten Securities Holdings and Mizuho Securities” on November 9, 2023, Mizuho FG has been deepening its efforts, including collaboration between the two Groups, to build new retail business models that combine both online and offline aspects in the asset building and asset management fields between Rakuten Securities and Mizuho Securities.

To further grow Rakuten Card, the core business of Rakuten’s FinTech operations, Rakuten aims to accelerate its collaboration with Mizuho FG and pursue growth opportunities in the corporate sector, which is expected to expand in the future, in addition to its strong business for individual customers. Rakuten believes that deepening and expanding its partnership with Mizuho FG, which has a broad customer base, will not only expand Rakuten Card’s business areas and achieve sustainable growth, but also aim to further expand and develop the entire Rakuten Fintech ecosystem with Rakuten Card at its core, which will contribute to enhancing the corporate value of Rakuten Group.

Details of the capital and business alliance

Initiatives for retail customers

Mizuho Bank and Rakuten Card plan to issue a co-branded credit card in December this year, which will allow users to earn Rakuten Points and enjoy benefits for ATM fees. Additionally, in an upcoming major update to Mizuho Bank’s Mizuho Mileage Club planned for next spring, the companies will consider introducing even more rewarding benefits, including integration with a new point service.

Furthermore, the Groups are considering introducing a digital installment payment feature* on Rakuten Ichiba, allowing Rakuten members to easily apply for and receive instant approval, as well as repeatedly use the service. Additionally, discussions are planned on the feasibility of adding a digital installment payment feature to Rakuten Card, as an additional payment option tailored to customer needs.

Initiatives for corporate customers and affiliate stores

With further transformation in corporate payments anticipated over the coming years, both Rakuten Group and Mizuho are considering providing new collaborative solutions (such as the streamlining of collection operations and the digital transformation of settlement operations) by combining payment functions for affiliate stores and transaction data held by Rakuten Group and Rakuten Card with Mizuho’s expertise in corporate cash flow support and diverse portfolio of payment services.

Additionally, as part of these efforts, Rakuten Card, UC and Orico will leverage their collective expertise to explore issuing new corporate credit cards that enable more flexible credit provision for corporate clients, particularly Rakuten Group’s network of approximately 900,000 affiliate companies involved in its portfolio of services.

Initiatives for enhancing business operations

Rakuten Group companies, Mizuho Financial Group companies and Orico will collaborate to streamline common operations such as acquiring and back-office tasks in their credit card businesses, as they aim to achieve even higher value-added services.

For acquiring operations, the alliance members will explore possibilities for mutual access and development of affiliate stores by effectively utilizing the millions-strong affiliate store networks held by the companies.

In response to the growing social issue of credit card fraud, both Groups will also share information on fraud tactics and countermeasures, and seek to contribute to the reduction of fraudulent activities across the entire credit card industry.

Going forward, both Rakuten Group and Mizuho Financial Group will explore a range of collaborative opportunities beyond these initiatives to further elevate their corporate value and drive mutual growth.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. We invite you to also register for our short weekly digest, the “Japan FinTech Observer”, on Medium, on LinkedIn, or on Substack.

We also provide a daily short-form Japan FinTech Observer news podcast, available via its Podcast Page. Our global Finance & FinTech Podcast, “eXponential Finance” is available through its own LinkedIn newsletter, or via its Podcast Page.

Should you live in Tokyo, or just pass through, please also join our meetup. In any case, our YouTube channel and LinkedIn page are there for you as well.