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[The Story Behind DG×Resona Partnership #2] Driving Cashless Payments Between Businesses and Supporting SMBs’ Digital Transformation
In 2022, Digital Garage and Resona Holdings formed a capital and business alliance aimed at strengthening their payment business, expanding market share, and advancing next-generation fintech business. By 2023, the partnership deepened further, extending into collaborative efforts in open innovation through startup investments. This four-part series explores the details of their collaboration and their shared vision for the future.
The second installment examines the payment business, featuring an interview with Digital Garage and Resona on topics including the background of their collaboration in the payment sector and its future prospects.
＜Interviewees＞
Kazuki Mochida; Group CDIO and executive officer; Resona Holdings, Inc.
Katsuya Iwanaga; managing director; Resona Kessai Service Co., Ltd.
Keizo Odori; director, Vice President Executive Officer and Group COO; Digital Garage, Inc.
Ryuji Yamanaka; Corporate Officer; Digital Garage, Inc.
Strengthening payment partnerships to expand cutting-edge financial services
Digital Garage and Resona Holdings have been reinforcing their capital and business alliance since December 2023. Regarding payment business, the two groups aim to build an integrated sales structure, targeting the provision of Digital Garage’s latest payment services to Resona Group’s 500,000 corporate clients.
The three main points are as follows.
- Digital Garage acquired a stake in Resona Kessai Service Co., Ltd. (Resona HD’s payment services subsidiary: RKS) and operates RKS as DG’s equity method associate.
- Provide Digital Garage’s advanced payment services to Resona Group and seconding and accepting employees to strengthen sales and marketing.
- Establish a joint sales team and structure to leverage Resona Group’s 800+ branches and 3,000 corporate business professionals.
As planned, RKS became Digital Garage’s equity method associate in April 2024 and began offering its first solution, the Resona PayResort+ online payment service. It is based on VeriTrans4G, a comprehensive payment solution from DG Financial Technology, Inc. of the Digital Garage Group. Resona PayResort+ includes a range of online payment methods to offer more possibilities to e-commerce businesses.
Entering the “blue ocean” of B2B cashless payments
What did the strengthened partnership in the payments domain mean for both companies? Business leaders from Digital Garage and Resona Holdings shared the following insights.
Odori: Japan is working to increase its cashless payment ratio to around 40% in 2025. This proportion is growing steadily, and it looks like we will achieve the goal ahead of time. However, Japan still has a lower level than other advanced nations, and where many people already use cashless payments. There’s still lots of room for cashless growth. Few companies have introduced digital methods for B2B payments in particular, which can be described as a “blue ocean” market area. For us, the biggest appeal of this collaboration is the ability to enter this sector together with Resona.
Their solid customer base of small-to-medium businesses (SMBs) is particularly important. Mainly, Digital Garage has targeted relatively large companies as new clients according to our past business strategy. We’ve achieved business growth, but reaching SMBs has been an issue. We thought we could better provide our services in a market with good growth potential by working with Resona.
Another key aspect is specialized expertise in finance. As the Digital Garage Group provides payment systems, we have always aimed to deliver services that contribute to improving the management of our client retail merchants. We’ve explored various business developments in the hope of providing financial assistance, including funding. If our clients’ businesses thrive, it will ultimately lead to increased revenue for us as well.
However, it’s not so easy to enter the financial sector. You have to work with a company that has ample expertise, including business registration, dealing with supervisory authorities, and specialized systems. An alliance with Resona, which has provided financial services for many years, allows us to successfully enter this business involving numerous difficulties and obstacles to entry.
Mochida: The changing external environment was one reason why Resona Holdings decided to strengthen this payment business alliance. We can’t meet customer needs by offering a single payment method in this world with many new payment methods and financial solutions for accounting tasks. We wanted to work with the Digital Garage Group to offer solutions that Resona didn’t possess.
Iwanaga: Because of these diversifying payment methods, another challenge was the difficulty of viewing financial data, which has been fundamentally held by banks. It was not easy to see a customer’s transaction information, so it was difficult to understand their business circumstances and offer optimum solutions. To change this, it was important for us to work with the Digital Garage Group and offer a wider range of payment methods.
Mochida: Resona Holdings has been focusing on the digital field for several years. We’ve been working on various ideas, such as our digital financial platform. While carrying out these initiatives, we decided to focus on collaboration with a company that has good technological skills for further innovation.
Digital Garage is a leading company in the cashless payment market, but it has a wide range of other solutions as well. We thought it was a unique company with totally different resources and expertise than Resona, whose main business is banking. We believe this collaboration will let us create “next-generation retail services,” not limited by our traditional banking knowledge and framework.
Enhancing expertise in payments and expanding value-providing opportunities
Roughly a year has passed since the two companies announced they would reinforce their alliance for the smooth transfer of people, things, and information. Results have already been seen during this time.
Iwanaga: Resona Holdings benefits from the alliance in ways beyond the ability to offer more services—the atmosphere inside our company has changed significantly since the Digital Garage Group employees arrived. Today, we are giving dedicated thought to the question of how to fulfill customer needs that we had previously given up on.
Mochida: The benefits of this strengthened payment business alliance can be simply described as a broader range of products and enhanced expertise for Resona Holdings in the payment sector. As a result, we can offer services in a more confident and aggressive way. We had to think conservatively because we lacked expertise in this sector, but our collaboration with the Digital Garage Group lets us try more new things.
Yamanaka: For the Digital Garage Group, a major advantage is the ability to approach SMBs, which was our aim for signing this alliance. I think we will be able to expand our business by offering payment solutions to Resona Holdings’ approximately 500,000 corporate clients. Particularly, Resona’s customers utilize bank-specific payment methods, such as direct debit, representing a segment we have been unable to reach until now. I also think we can build a stronger sales foundation together with Resona Group’s 800+ branches and 3,000 corporate business professionals.
Aiming to co-create new solutions by promoting digital payments
Finally, we asked the interviewees about the companies’ future prospects.
Odori: We will keep working with Resona to find new customers for the Digital Garage Group’s payment services. In particular, more than 90% of Japanese companies are SMBs. I think they will make major contributions to our economy by introducing digital services. I want to develop brand-new solutions utilizing the abundant data of both companies, along with generative AI and other advanced technologies, without being bound by past ways of doing things.
Beyond the payment sector, I hope to jointly develop next-generation Fintech services that meet increasingly diverse customer needs and offer them to the customers of both companies.
Mochida: I don’t think we can reverse the global cashless payment trend, as Mr. Odori mentioned. Striving to be the number-one retail banking company, Resona Holdings will step up our digital transformation support for SMBs. I hope to work with the Digital Garage Group to co-create new solutions, and also to refine the existing solutions offered by both companies.
Iwanaga: Resona Kessai Service’s plans include enhanced collaboration with regional banks. Clients across the nation are struggling with digital transformation. Therefore, we aim to offer our “Resona PayResort+” as a product for regional financial institutions, hoping to assist in solving the challenges faced by their customers.
Mochida: At Resona, we often say, “Our future rivals are not other banks.” We can’t survive unless we offer services that stand out when compared to other payment services across the world. I hope to actively work with professionals outside our company to be victorious in this fierce competition.
