Messaging app Line to move into Fintech, cryptocurrency

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Line, Japan’s most popular messaging app, has announced plans to establish its own cryptocurrency exchange and offer a variety of Fintech services, in a bid to combat stagnant user numbers and pull ahead of rival chat platforms.

Line Corp’s move into finance and blockchain technology will build on mobile payment functions already provided to the messaging app’s 200 million users, 40 million of whom conducted more than four billion US dollars’ worth of transactions last year.

Line has seen its range of cute stickers grow so popular that stores selling company merchandise have opened in Japan. /VCG Photo

A new company – Line Financial Corporation – has been established and an application to set up a cryptocurrency exchange has already been filed with Japanese authorities, who have given approval to over a dozen exchanges since new regulations were introduced last year.

While it remains unclear how exactly bitcoin, blockchain and Fintech will be integrated into Line’s messaging services, an official announcement on the company’s website suggests that the Line app will be used as “a place to exchange and transact virtual currencies, loans, and insurance.”

/VCG Photo‍

The statement from Line also looked to clarify that security would be a priority, with the company aiming to “provide a financial service that is convenient and safe to users,” as well as promoting the development of blockchain technology.

Security will be vital if Line really wants to convince its users to trade cryptocurrencies through its app, with Japanese investors still reeling from the biggest ever hack of a virtual currency exchange.

530 million US dollars’ worth of cryptocurrency was stolen from the Coincheck exchange, with Japanese authorities still investigating how the exchange was left vulnerable to cybercrime.

A 2016 joint-IPO saw Line raised 1.1 billion US dollars on the Tokyo Stock Exchange and Wall Street, after the messaging app, which is widely used in Japan, Thailand and Indonesia, looked to focus on its core markets rather than on continued overseas expansion.

However, this latest move into Fintech suggests Line is looking for a competitive advantage against rising apps like WeChat and Facebook’s WhatsApp and Messenger.

WeChat Pay is widely used by hundreds of millions of people across China, and increasingly overseas. /VCG Photo

After peaking in March 2017, user numbers dropped off－a worrying trend after Facebook added around 750 million users in Asia since 2012. WeChat has already established itself as the leading messaging app in China, and it saw 1.2 trillion US dollars’ worth of transactions in 2017.