Japan based telecommunication and internet corporation, Softbank and internet auction giant eBay on May 9, 2012 said they were joining hands. The two companies will come together to bring the US firm’s PayPal system to Japan for the first time.

The new PayPal offering will allow the retailers accept payments by credit or by debit card through the thumb sized device on retailers’ smartphones. Masayoshi Son, the Softbank president said that the pair will seek to become the number one in terms of online settlements in Japan.

eBay has been a major force in terms of online billing globally but is yet to make its way in to the Japanese market with the other forms of electronic money. But with the increase in the usage of smartphones, the market has opened up an opportunity to expand credit card usage in a country where people still pay in cash.

Initially, the PayPal Here system will cost about 1,200 yen with a flat charge of 5.0 percent on purchases. The firms said that such a level would be attractive to small and medium sized merchants. The companies also said that they will invest about 2 billion yen to set up the joint venture PayPal, Japan.