Japan’s aging population still strongly favors cash for daily transactions, with government data showing that in 2023, cashless transactions accounted for only 39.3% of the country’s total spending.
Despite reaching 126.7 trillion yen ($885 billion), Japan’s cashless rate lags behind other advanced economies, though the government aims to push it to 40% by 2025. As Japan embraces cashless initiatives, Tokyo-based fintech startup SmartBank is stepping in to accelerate this shift with its personal finance management tools.
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Empowering Cashless Transactions in Japan: The Founding of SmartBank
SmartBank, founded in 2019 by Shota Horii (CEO), Yuta Horii (CTO), and Jun Taketani (CXO), is on a mission to make cashless finance accessible. The team founded the company after successfully selling their prior venture, Fablic, to e-commerce giant Rakuten in 2016.
Their experience at Fablic highlighted a significant problem in Japan’s financial sector: a continued reliance on cash for everyday transactions. Determined to offer a solution, the SmartBank team launched a digital finance platform to address Japan’s unique financial behavior.
SmartBank’s user base largely consists of people in their 20s and 30s, along with married couples who are interested in efficiently managing their finances. To date, the company’s app has surpassed one million downloads, indicating a growing interest in their services. However, SmartBank has yet to disclose exact user numbers.
The startup’s flagship products revolve around its B/43-branded prepaid cards, designed for specific demographics. The B/43 My Card serves individuals, while the B/43 Pair Card caters to couples who want to manage joint finances—a much-needed tool in Japan, where traditional banks generally don’t offer joint accounts. Additionally, there is the B/43 Junior Card, aimed at teenagers, which provides a safe entry into financial independence. According to the company, the B/43 Pair Card has quickly become the most popular, filling a major gap left by Japan’s traditional banking system.
SmartBank announced a new $26 million funding round, comprising 1.1 billion JPY ($7.2 million) in debt financing and 2.9 billion JPY ($18.8 million) in equity, with support from Global Brain, a venture capital firm, and SMBC, one of Japan’s largest banks. With a total funding of 5.93 billion JPY ($38.5 million) since its launch, SmartBank aims to use the funds for expansion, including doubling its workforce from 49 to approximately 100 employees by 2025. This round follows its $20 million Series A round in July 2022 and reflects its goal of evolving into a comprehensive digital financial service provider.
A notable feature SmartBank recently launched is an AI-driven financial assistant, powered by generative AI, to help users analyze and optimize their financial habits. This feature allows users to better manage their finances through automated insights, helping them spend, save, and invest more efficiently. Additionally, the app now supports linking credit cards and bank accounts, providing users with a full financial overview even if they don’t have a SmartBank card.
Since receiving a money transfer license and a prepaid payment instrument license, SmartBank can now manage user deposits and offer peer-to-peer transfers and cash withdrawals—services that its competitors, like MoneyForward and Zaim, cannot provide due to regulatory restrictions. These licenses enable SmartBank to offer a suite of services typically unavailable in cash-reliant Japan.
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Looking to expand revenue, SmartBank is not solely relying on interchange fees. It has introduced additional features, such as Buy Now Pay Later (BNPL), B/43 Plus subscriptions, and referral programs. Through these initiatives, SmartBank aims to build a diverse financial ecosystem, positioning itself as a forward-thinking leader in Japan’s transition to cashless transactions.
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