Japanese startup Paidy, ExCo’s online payment service, announced a $15 million Series B funding round led by SBI Holdings and Eight Roads Ventures Japan on Thursday. Other investors include Itochu and two returning funders: SIG Asia and Arbor Ventures.
Like every country, Japan‘s e-commerce landscape is growing, projected to go from $89 billion in 2015 to $122 billion in 2018, according to e-commerce portal PFSweb.
Paidy is trying to develop a non-credit card payment network for Japanese e-commerce, already reaching 600,000 stores online that allow shoppers to check out with merely a phone number. That includes clients like Adidas and Dean & Deluca, according to the company.
SEE ALSO: Online vendors promote the digital wallet in China
The reasons to go that route have a lot to do with increasing credit card fraud in the country, which amounted to £43.1 million in 2014 according to Accenture.
While fraud might be one motivation, Japanese consumers prefer cash in general. The same Accenture report points out only 60% of payments in Japan are done by card because the majority of purchases are made on a mobile device.
The company is the brainchild of Canadian investment banker Russell Cummer. Other investors in the company include 500 Startups, Juvo Capital, CyberAgent Ventures, Cherubic Ventures and Recruit Strategic Partners.
Unlike fintech hubs Singapore and Hong Kong, Japan’s scene is still nascent, having seen only $44 million in venture investments in the sector in the first three quarters of 2015.