LINE aims to realise its financial services ambitions with ‘Life on LINE’

• LINE has currently around 187 million monthly active users on a global scale.
• Globally, registered payment users grew from 40 million in November 2017 to 48.3 million by June 2019
• Thailand will become a key battleground between LINE and Alipay and the litmus test as to which player have what it takes to win the customer mandate

In its most crucial venture to date, LINE aims to grow into a comprehensive financial service provider in the region and is preparing to launch its ‘smartphone bank’ across four markets most possibly in the next 24 months, supported by its mobile payments platform LINE Pay. LINE has currently around 187 million monthly active users on a global scale.

Globally, registered payment users grew from 40 million in November 2017 to 48.3 million by June 2019, according to LINE.

 “If we don’t upgrade finance, our lives will never be complete,” highlighted Shin Jungho, its co-CEO and chief WOW officer at the conference. He further added, “When we launch a new business, we focus on pain points such as fees to move money and paperwork. We look at the big scope of pain points when we look at business opportunities.”

At this year’s conference, LINE co-CEO Jungho Shin revealed their new vision, 'Life on LINE', under which LINE will pursue “WOW” by becoming a “life infrastructure” that leverages lifestyle innovations to support all aspects of users’ lives 24/7.

In Japan, LINE News grew from 14 million page views as of July 2013 to 10 billion page views as of the end of May 2019. And with 80 million of messaging app users in Japan, it is the number one news and content platform there. It also has grown into the number one payments app based on the number of transactions in Taiwan.

LINE Pay strengthened its position in those markets but its adoption rates for LINE Pay, compared to overall messaging app users, and active users, continue to be low. Only 26% of total LINE users are registered on LINE Pay. This is expected to grow in the process of building a more comprehensive lifestyle platform.

It has been growing fastest in Taiwan beginning early 2019, where registered LINE Pay users stood at 2.9 million as of June 2018 and 6.3 million as of June 2019. LINE services are tightly integrated with the largest consumer bank CTBC.

LINE Pay doubled its active user base in Taiwan and Thailand

Home run in Japan

Registered users for LINE Pay in Japan stood at 36 million by June 2019 compared to 80 million monthly active app users in Japan. After the “Pay Toku Campaign” which started in June 2018, LINE Pay’s QR-based payments grew by 2110% from May 2018 to 26 March 2019. Users moved a whopping $9.2 billion (JPY 1 trillion) of money in 2018. In Japan, the number of transactions on LINE Pay stood at 13.7 million in June 2019.

In particular, on the payments side, it entered into a mobile payments alliance with VISA in Asia and fintech electronic fund transfer system MerPay, Starbucks and NTT Docomo in Japan. Its Starbucks alliance is used by more than one million Japanese users. VISA will enable LINE users to pay globally at all VISA POS stations. Interestingly in Japan, it didn’t choose a bank for issuing its VISA card but went with Orico, one of the largest consumer credit companies.

Thailand: Good growth but a challenging market

Indonesia and Thailand are different stories though, as LINE has to compete head-on with powerful Chinese or local financial payments players.

In Thailand, where registered LINE PAY users stood at 3.1 million as of June 2018 and 6 million as of June 2019, it is second in regards to payment users with its Rabbit Pay platform after True Money, an Alibaba-backed rival which claimed 15 million registered wallet users by July 2018. Active user rates for both players are not available. In Indonesia, LINE’s messaging app user numbers have been in decline for a few years and it does not offer LINE Pay.

Much will depend on the success of their digital bank, which will be launched with Kasikornbank in Thailand and KEB Hana Bank in Indonesia. In Japan, where it will probably be launched first, it has already set up a preparatory corporation since May. The digital banks will start with deposit taking and lending products right from its launch. Its personal loan service, LINE Pocket Money will launch soon on the messaging app where users can apply based on the unique LINE score based on user attributes and online activities in combination with credit information data. A micro-investment services, cross border peer-to-peer payments services and other financial services are underway.

LINE CEO Takeshi Idezawa during his key note speech and demonstration of the credit score

This year’s LINE conference showed that there is no other textbook like that of Alipay and WeChat Pay’s road to success and LINE executives are clearly making efforts to follow in those footsteps. LINE has already achieved a comfortable market position in Japan and Taiwan and is in the process of rolling out a comprehensive finance platform with local partners in its overseas markets, a move that goes beyond payments. It remains to be seen whether it can give a boost to its Thailand operations in the face of a growing dominance by True Money and to give a lifeline to its platform in Indonesia. The success of a digital only bank in those country’s is a long shot since there have been gradual growth from Digibank Indonesia by DBS and Jenius run by Bank BTPN and very limited success of digital only players such as ME by Thai Military Bank in Thailand. It is Thailand for where the Japanese and Chinese platforms will go head-to-head and which will become a crucial overseas battle ground in winning the wallet war.