PayPay subsidizes merchant fees via owned rails

Rakuten Pay can charge merchants less because the wallet sits on top of Rakuten owned payment rails, not just a third party processor. In practice, that means Rakuten can keep more of the economics inside the group through acquiring, card, bank, and loyalty products, then use that margin to win store acceptance. That is especially powerful in Japan, where QR wallets compete store by store and merchant fees are a key sales lever.

• Rakuten Payment runs Rakuten Pay alongside Rakuten Point Card, Rakuten Edy, and merchant marketing tools. Rakuten Card also absorbed the online payments business in 2023, which shows how tightly the wallet is linked to the group’s card acquiring and merchant acceptance stack rather than outsourced processing.
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• This matters because QR payments are a low take rate business. PayPay’s blended take rate is about 1.4% of payment volume, so even small processing cost differences change how much a wallet can give back through lower merchant pricing, points, or sales incentives.
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• The pattern is similar to other ecosystems that use payments as the front door and make money on adjacent services. PayPay already uses merchant transaction data to offer working capital advances and plans broader merchant software and financial services, which is the same logic behind subsidizing acceptance to own the merchant relationship first.
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The next phase is less about winning a few basis points on payment fees and more about turning acceptance into a broader merchant operating system. The wallets with their own processing, balance sheet, and rewards network will keep pushing fees down, then earn back the economics through lending, banking, advertising, and software sold to the same merchants.