October 13, 2026, 9:15 a.m. (JST)
[Japan] PayPal (Headquarters: Singapore; PayPal Tokyo Branch) co-exhibited with Paidy, provider of the “Buy Now Pay Later” service “Paidy,” at the “Tokyo Game Show 2026,” held at Makuhari Messe from September 17 to September 21, 2026.We spoke with Mr. Michihiko Yoden, Head of Japan Operations at PayPal’s Tokyo Branch, about the company’s initiatives in the gaming industry.
Payment Infrastructure
Supporting the Gaming Industry Used by a Quarter of Gamers in Europe and the U.S. for Payments
PayPal also exhibited at the Tokyo Game Show last year, where it deepened its dialogue with gaming industry stakeholders and received positive feedback. Mr. Yoden said, “PayPal has actually become the payment infrastructure that supports the gaming industry, and is used by more than 100,000 gaming companies.”
Through its global payment infrastructure connecting over 200 countries and regions, as well as advanced fraud prevention technology, PayPal reportedly supports game Payment Service Providers in their international expansion and provides a safe and seamless payment experience.PayPal is used by console companies, PC game developers, mobile app developers, indie game developers, and publishers. “In fact, there are very few customers who don’t use PayPal,” said Mr. Yuden.With a Total Payment Volume of over 1.8 trillion yen, more than 33 million gamers—one-quarter of the total in Europe and the U.S.—use PayPal for payments.
Focusing
on Improving the User Experience Understanding Regulations in Each Country to Provide a One-Stop Solution
While usage in Japan is growing, the company is prioritizing the improvement of the user experience. “The experience is crucial in gaming, and we will continue to ensure that players can enjoy games without losing their sense of immersion by providing a seamless payment experience,” said Mr. Yoden.
Improving the profitability of game companies is also crucial. For example, regarding in-app purchases, the new smartphone law enacted in Japan has created a major shift, and there are also movements toward legal reforms and deregulation of platforms outside of Japan.Since many game companies operate globally, a key factor is understanding the regulations of each country, incorporating them into their business models and operations, and providing a one-stop solution.
Currently, mobile app download numbers have plateaued, and the market is shifting from a focus on acquiring new users to a phase aimed at improving lifetime value (LTV) through the continued engagement of existing users.Key strategies in this context include raising LTV through the introduction of subscriptions and building an ecosystem that incorporates user-generated content (UGC).
By establishing a system where users themselves create content and feed it back into the platform, it is possible to increase gamer engagement and boost usage frequency. To achieve this, it is essential to go beyond one-way communication from the platform and include a feature that distributes revenue to users (creators). PayPal’s functionality is being utilized as the infrastructure for this global revenue-sharing system.
Payment Processing Fees are not disclosed and vary by country and merchant.In Japan, the group owns Paidy, and deferred payment services are also growing in other countries. For example, in the U.S., the U.K., and Germany, PayPal Group-affiliated deferred payment services are reportedly among the top three in the industry in terms of growth. “In payments, ensuring flexibility—such as ‘buy now, pay later’ or prepayment—is a major point,” said Mr. Yoden.
Benefits
of Improved Authorization Rates and Fraud Prevention Contributing to Overseas Expansion and Revenue Growth
In the Japanese context, the user experience (UX) of apps and mobile games is crucial, and there is a demand for one-click payments.While a certain number of users do not want to use credit cards or do not own them, PayPal has addressed this by providing a system that allows users to register bank accounts from over 350 financial institutions in Japan for payments and withdrawals. “Since registering bank account numbers can be a hassle, we have users register them in their wallets and make payments that way,” said Mr. Yuden.
Furthermore, while in-person QR Code Payments are becoming increasingly widespread in Japan, they are reportedly prone to fraud in the digital realm and carry higher Payment Processing Fees compared to credit cards and other methods. Mr. Yuden explains, “Since PayPal started online, we have robust fraud prevention measures in place. And because we operate at scale, our Payment Processing Fees—even for online payments—are surprisingly reasonable.”
From the Merchant’s perspective, data shows that using PayPal improves the Authorization Rate by 7%. It also helps prevent abandoned carts. According to PayPal’s data, introducing payment methods other than credit cards
In Japan, while the mandatory implementation of 3-D Secure offers benefits in preventing fraud, there are also concerns that it may lead to a decline in conversion rates.Mr. Yoden explains, “There is a trade-off between fraud prevention and convenience. PayPal possesses a wealth of data to combat fraud and offers wallet features that supplement 3-D Secure, making it possible to increase conversion rates while reducing the risk of fraud.” He added that PayPal is able to provide its buyer protection program precisely because it has a robust set of risk-related data.
When expanding in-app purchases globally, it is crucial to establish effective user pathways. By leveraging “PayPal Ads” and introducing “subscriptions” as pathways beyond payment processing, game companies can further expand their strategic options.
As part of its collaboration with payment platform providers, PayPal signed a basic agreement on March 23, 2026, with Payment Service Provider SP.LINKS regarding cooperation in the digital commerce sector within Japan’s gaming and entertainment industries.SP.LINKS operates businesses related to payments in the entertainment sector—including games—such as S8 plus and in-app purchases, and PayPal will be utilized within these services.
Synergies with Paidy are also expected in the future. Paidy is celebrating its fifth anniversary as part of the PayPal Group. It has been one year since Mr. Yoden took charge of PayPal’s Japan operations, and he notes that “PayPal and Paidy are rapidly growing closer,” citing their joint exhibition at the Tokyo Game Show as an example.Collaboration in sales and marketing is increasing, and he noted that as this deepens, functional integration will follow. He believes it is a significant advantage to be able to offer both PayPal—which meets the needs of cross-border transactions—and Paidy, which is particularly strong in the Japanese retail market.
In closing, Mr. Yuden stated, “The Japanese gaming industry is a major industry that we can be proud of on the global stage. I, too, am proud that Japanese game companies are expanding globally and establishing a significant presence, and PayPal is eager to contribute to their overseas expansion and revenue growth.”
