Rakuten, the largest e-commerce conglomerate in Japan, is expected to become the first major e-commerce giant to integrate crypto payments into its platform, allowing millions of users to purchase products using crypto assets like Bitcoin.
The Japanese cryptocurrency sector is in an ideal position to push the mainstream merchant adoption of digital assets due to the growing efforts of Rakuten and leading retailers in the likes of Bic Camera that have actively experimented with cryptocurrencies throughout the past year.
Efforts of Rakuten and Bic Camera are Key to Crypto Adoption
On January 18, in an official corporate statement, Rakuten announced the restructuring of the company, establishing a subsidiary called Rakuten Payment.
The company revealed that Rakuten Payment will oversee two divisions comprised of Everybody’s Bitcoin and Rakuten Edy.
In August last year, Rakuten acquired Everybody’s Bitcoin, a local cryptocurrency exchange, for around $2.3 million to utilize the infrastructure of the exchange to facilitate cryptocurrency payments on the e-commerce platform.
At the time, the company said:
“We expect that the role of cryptocurrency-based payments in e-commerce, offline retail and in P2P payments will grow in the future. In order to provide cryptocurrency payment methods smoothly, we believe it is necessary for us to provide a cryptocurrency exchange function, and have been considering entry into the cryptocurrency exchange industry as the Rakuten Group.”
As of late 2017, Rakuten had more than 95.1 million active registered accounts. If the company pushes forward its plans to use its cryptocurrency exchange to process payments in e-commerce, it may drastically increase the level of merchant adoption in Japan.
Already, the integration of Bitcoin by Bic Camera, the largest electronics retailer in the country, has led to the increase in overall awareness of the dominant cryptocurrency across the region.
According to the cryptocurrency market data provided by CryptoCompare, Japan remains as the second largest Bitcoin exchange market behind the US with
In June 2018, Bic Camera PR and IR chief Masanari Matsumoto told Japan-based publication Bitcoin.com in an interview that the number of Bitcoin payments at its stores has been gradually increasing.
A positive contributing factor to the growth of Bitcoin usage in Bic Camera stores in the region is the unforeseen increase in the number of Japanese users using Bitcoin to purchase products at local stores.
“When Bic Camera first installed the Bitcoin payment system in its stores, we expected that the customers paying in Bitcoin would mostly be foreigners. We noticed that Bitcoin was becoming very popular. Then the government announced that Bitcoin was officially legal, so we finally felt more comfortable introducing Bitcoin as a method of payment in our stores. Bic Camera always aims at responding to its customers’ demands, and there was a huge demand at the time,” Matsumoto said last year.
Why Has Merchant Adoption Stalled in the Past Year?
Since early 2017, there were talks about Expedia, Microsoft, Steam, and many other leading merchants integrating cryptocurrencies into their systems.
While some experimented with crypto payments for several months, the majority of the firms were pressured by users and complaints on the inefficiency of cryptocurrencies in settling fast payments.
When the price of Bitcoin achieved its peak at $20,000 in late 2018, users were having issues in processing Bitcoin transactions due to the clogged mempool, a system the Bitcoin network uses to store temporary transactions before broadcasting it to blocks.
As the scalability of the Bitcoin network and major crypto assets improves, the efforts of large corporations such as Rakuten and Bic Camera may fuel the adoption of cryptocurrencies by merchants in the upcoming quarters, which the cryptocurrency sector currently lacks.
Photo by Jase Bloor on Unsplash