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Line Pay service to be terminated in Japan next year

ANN/THE KOREA HERAD – LY Corp, the operator of mobile messenger Line, has announced its decision to discontinue the Line Pay service in Japan next year. The move comes amid criticisms suggesting Japan’s pressure to separate Naver Corp, South Korea’s largest internet portal operator, from LY.

LY, a joint venture equally owned by Japan’s SoftBank and South Korea’s Naver, stated on Thursday the mobile payment service will be terminated in Japan by April 30, 2025. The company cited the need for “optimal allocation of management resources” as the reason for this decision. The company said some 44 million Japanese users of Line Pay will be able to transfer their balances to PayPay, a similar service provided by SoftBank, while its service will be continued in Thailand and Taiwan.

The decision was made to “selectively focus” management resources in the financial domain by “reorganising” its business and “integrating” overlapping business areas to expand group synergies, the company explained in the announcement.

LY’s announcement came a month after the company officially said it has been in talks with Naver over the possibility of changing their capital relationship following a data leak incident last year.

Earlier this year, Japan’s Ministry of Internal Affairs and Communications issued an administrative guidance to LY regarding the incident, urging it to decrease its dependence on Naver apparently by handing over its stake to SoftBank.

The Line logo. PHOTO: AFP

In November last year, LY said over 300,000 records of its users’ personal information were leaked after Naver Cloud Corp, Naver’s cloud computing affiliate, came under cyberattack, as the two companies share a common authentication system.

Since then, LY has been taking various measures to lessen Naver’s influence in the company, including the departure of a key South Korean executive Shin Jung-ho from its board.

Shin is known as the “father” of Line in South Korea as he developed the service at Naver in 2011.

Japan’s actions drew criticism in South Korea, with many viewing them as an attempt to diminish foreign influence on the widely used online platform in the country.