TOKYO -- Mitsubishi UFJ Financial Group, Japan's largest bank, plans to launch a mobile payment service with staffing company Recruit Holdings using the bank's digital currency after regulatory constraints stymied its solo plans.
Users will convert funds from their bank accounts or elsewhere into the digital currency using a smartphone app. The service will use this currency in transactions, which will be handled through QR codes. Money sent via the app can be moved back into an account as cash, allowing for transfers between individuals.
The service will be available at companies participating in services operated by Recruit, including restaurant and beauty salon reservation site Hot Pepper and hotel booking site Jalan. Users can earn loyalty points with each payment they make.
MUFG and Recruit, which also owns recruitment site Indeed and work review site Glassdoor, plan to set up a joint venture next year, with Recruit holding a 51% stake.
MUFG initially ventured into the digital currency space on its own, launching a test of its "MUFG Coin" in June 2017. It planned to bring the currency into general use as early as that year, but it ran into delays as it struggled to balance security with convenience.
The megabank ultimately concluded that Japanese banking law would not give it the flexibility it needed to operate the service. The venture with Recruit will operate as a money transfer company, which is governed by a different legislative framework.