SoftBank's subsidiary payment application operator PayPay plans to go public in the United States, with an estimated valuation of over $20 billion.

According to informed sources, it is reported that the Japanese payment app operator PayPay, under the preparation of its parent company SoftBank (SFTBY.US), plans to conduct its first public offering (IPO) in the United States as early as December this year, with an estimated valuation exceeding 3 trillion yen (approximately 200 billion US dollars). The sources said that SoftBank has been meeting with institutional investors since mid-September to discuss potential valuation issues for PayPay in the IPO. Investors generally believe that 2 trillion yen is the valuation benchmark, but there is also a view that the valuation may exceed 3 trillion yen. The sources added that the current valuation benchmark is mainly based on PayPay's performance in expanding its business in Japan, but investors have differing views on its prospects for overseas expansion, which may be a key factor in supporting a higher valuation. The sources emphasized that the discussions are still ongoing and many factors, including valuation, depend on market conditions. Last month, PayPay announced that users will be able to make payments overseas, with the first country to be opened being South Korea a market that is one of the most visited overseas destinations by Japanese travelers. The sources said, "The key question for the future is whether PayPay can realistically portray its overseas expansion as a growth story, given that its business foundation is quite limited not only in the U.S. but also in Asia." PayPay's plans to list in the U.S. come at a time when the U.S. IPO market is experiencing its most active quarter since the fourth quarter of 2021. According to data from financial data company Dealogic, in the third quarter of this year, companies raised a total of $24 billion through IPOs in the U.S. PayPay, through its mobile payment app, offers cashback promotions to drive Japanese consumers towards cashless payments. The company is a leader in Japan's QR code payment market and offers various financial services such as banking and credit cards. While the proportion of cashless payments in Japan exceeded 40% last year, in comparison, South Korea and China have proportions exceeding 80%. The Japanese Ministry of Economy, Trade and Industry hopes to further increase this proportion to reduce transaction costs and alleviate labor shortages. Reports from SoftBank's telecommunications division show that the financial sector including PayPay saw a more than twofold increase in operating profit in the quarter from April to June this year, reaching 18.1 billion yen. SBI Securities analyst Yukari Housui said, "Structural profit improvement in this business segment is progressing, and future growth can be expected." Meanwhile, PayPay is also actively strengthening its cryptocurrency business. Last week, PayPay announced the acquisition of 40% of Binance's Japan business and plans to launch new cryptocurrency services. Currently, PayPay's shares are jointly held by multiple SoftBank entities, including wireless operator SoftBank Corporation, SoftBank's investment division Vision Fund, and the internet company LY Corporation, a joint venture between SoftBank and South Korea's Naver Corporation.