Japanese digital wallet operator PayPay and SoftBank’s investment arm raised about 880 million dollars in a US IPO by selling 55 million American depositary receipts at 16 dollars each. The deal priced at the bottom of the 17 - 20 dollar range but still valued PayPay at roughly 10.7 billion dollars, making it the largest US listing by a Japanese company since Line’s IPO in 2016 and drawing in cornerstone orders of up to 220 million dollars from Abu Dhabi Investment Authority, Qatar Investment Authority and Visa.
PayPay has become the dominant QR-code wallet in Japan, with more than 72 million registered users and nine-month revenue of 278.5 billion yen and profit of 103.3 billion yen, over three times the profit of a year earlier. It sits at the center of a rapid transition in Japanese payments, where QR codes have grown from 0.2 percent of cashless transactions in 2018 to 9.6 percent in 2024, offering global fintech investors a relatively clean way to play the structural rise of non-cash payments in Japan and a future partner or rival for incumbents like PayPal in Asia.
How the IPO fits into SoftBank's strategy
PayPay's IPO comes at a time when SoftBank Group $SFTBY is heavily monetizing assets to free up capital for new bets in artificial intelligence and other technologies. In the June-December 2025 period alone, SoftBank sold a block of T-Mobile US $TMUS shares for nearly $13 billion, and in parallel was just preparing PayPay's Nasdaq listing.
After the IPO, SoftBank should continue to control roughly 92% of the voting rights in PayPay, so this is more of a partial monetization and creation of a market valuation than a full-fledged exit. There are several implications for SoftBank shareholders:
they get a transparent market price for a key fintech asset
at the same time, SoftBank shows that it is capable of turning late fintech investments into liquidity
and reinforces its "AI and platform investor" narrative, funding riskier bets (such as around OpenAI) from sales of more stable assets such as PayPay
Why PayPay is also interesting in the context of PayPal $PYPL and global payments
PayPay was formed in 2018 as a joint venture with Paytm and has quickly outpaced competitors like Rakuten Pay thanks to aggressive marketing, massive subsidies and SoftBank support in merchant acquisition. Today, it dominates QR payments. According to data from the Japanese Ministry of Economic Affairs, QR codes will already account for nearly 10% of cashless transactions in 2024, while the share of card payments (credit and debit cards) at around 83% is slowly declining.
For global players like PayPal, PayPay is interesting on two levels:
As a benchmark for monetizing digital wallets in a more conservative, historically "cash" market.
as a potential partner for cross-border payments and acceptance networks in Asia
PayPay has already begun to expand its reach beyond Japan. It has made its service available in more than 2 million stores in South Korea for Japanese customers by 2025, and this February announced a partnership with $V targeting opportunities in the US. If this collaboration develops, PayPay could serve as a bridge between the Japanese QR ecosystem and the global card infrastructure, where PayPal has a strong presence.
PayPay's numbers: growth and monetization
PayPay's recent financial performance shows that it is not just a "subsidized" growth story. In the nine months to the end of December, the company achieved sales of 278.5 billion yen and profits of 103.3 billion yen, up from 220.4 billion yen in sales and 28.96 billion yen in profits a year earlier. That translates into roughly 26% growth in sales and a more than 250% increase in profitability year-on-year over the same period.
SoftBank had previously disclosed that GMV PayPay for the first quarter of fiscal 2025 reached 4.5 trillion yen, representing 24% growth. PayPay's EBITDA grew 87% to 21.9 billion yen in the same period. In a separate press release, PayPay said it expected approximately 12.5 trillion yen in GMV and 7.8 billion payments in 2024, with roughly two-thirds of the domestic QR payments market in Japan going through PayPay. This shows that the company is not just "one of many" wallets, but an infrastructure for everyday payments.
Risks and potential implications for investors
In the short term, the main risk is valuation and sentiment towards the IPO. The issue was at the lower end of the original price range and in an environment that is nervous due to the war in the Middle East and increased volatility. Should the first weeks of trading bring higher volatility or pressure on the price, this may hinder the market's willingness to "premium" for other fintech IPOs in the short term, and thus the comparison with established players such as PayPal.
In the medium term, the key risk is concentration on the domestic market. Despite the first moves abroad, the majority of PayPay's business is still in Japan. Changes in regulation, competitive pressure from banks and card associations, or a potential slowdown in the growth of cashless payments could slow revenue growth and margins. Another factor is SoftBank's control - with around 92% of the post-IPO vote, the parent group has a decisive influence on PayPay's strategy and capital policy, which from the perspective of minority shareholders carries both an advantage (support from a strong owner) and a risk (decisions driven by SoftBank's priorities, such as funding other AI projects).
In the long term, the key question will be whether PayPay can establish itself as a regional or global player in digital payments, or whether it will remain primarily a domestic infrastructure. If the collaboration with Visa and possible further partnerships expand into a globally usable wallet (for example, for Japanese travelers or e-commerce), PayPay could be put in a more direct comparison with companies like PayPal. But if expansion remains limited and growth in Japan begins to slow, valuations may be more dependent on the domestic cycle than the global fintech story.
What to watch next
Investors should watch:
First weeks of Nasdaq ADR PAYP trading, volume developments and the market's willingness to hold valuations around $10-$11 billion
Specific steps in the PayPay - Visa partnership, particularly what US or cross-border payments products will emerge from it
the growth rate of GMV, number of users and EBITDA in quarterly figures to see if the high growth rate will be sustained after the IPO
SoftBank' s strategy with its stake in PayPay - whether it will be more of a long-term holding and value growth or a gradual sale and further monetisation
Conclusion
The most important variable in the PayPay - SoftBank story is now the ability to translate a dominant domestic position and rapid profitability growth into an international fintech story that will be relevant alongside names like PayPal. If PayPay maintains GMV and profitability growth in Japan while visibly monetizing Visa-type partnerships abroad, the IPO can serve not only as a one-off monetization for SoftBank, but also as the start of a new publicly traded payments title with potential; the thesis would be broken the moment it becomes clear that growth in Japan is stalling and expansion beyond the borders remains limited, making PayPay more of a "premium priced domestic asset" than a global fintech platform.