There is a new name to watch in the digital payments marketplace: PayPay. In August, Japanese banking giant SoftBank announced it had “confidentially submitted” an application for a US IPO for its payment platform.

By Euny Hong, Staff Writer, IBM Think

What makes PayPay a serious contender—even among the likes of Apple Pay, PayPal and Venmo—is its advanced AI capabilities, according to Kamini Belday, a Strategic Growth Leader for AI, Payments and  Service Alliances at IBM.

Belday told IBM Think that PayPay is a smart bet on SoftBank’s part, given its AI track record. “There is always room for platforms that solve real pain points with precision,” she said.  “The platforms that master AI will reduce fraud losses, expand credit access and deepen customer loyalty through personalization. What SoftBank is attempting with PayPay isn’t just market entry — it’s ecosystem disruption.”

The banking industry's pain points

According to Belday, PayPay’s AI is especially noteworthy for its security features, which include threat analysis. “Since PayPay is heavily QR-based, it uses AI to detect tampered or spoofed QR codes in real time,” she said. “This is highly localized and not a feature in some of its peers.”

PayPay is one of Japan’s most widely used payment platforms. In its current form, it’s focused on the retail market—that is, regular customers. But AI’s transformative potential may be even greater in enterprise transactions, due to their sheer volume and complexity and the monetary stakes involved. Belday, who honed her banking and tech expertise at Citi, explained that for banks, liquidity management—seeing whether they can meet their financial obligations—is key. “Seeing your realistic liquidity position is what keeps the engine running,” she said. “Banks have investments in many places. But if something goes wrong tomorrow, can they cover those losses?”

Softbank isn’t the only enterprise using AI to help banks in this fashion. Liquidity management depends on connecting fragmented systems and surfacing insights quickly. IBM has developed technologies that enable this interoperability for AI-driven payment platforms. With watsonx.data, for example, financial institutions can link different payment databases and “use AI data to spot patterns, detect risks and give real-time insights,” Belday said.

SoftBank CEO keen on AI domination

PayPay comes to US shores as a proven quantity. Its parent company is hardly a start-up; SoftBank was founded in 1981, and its founder, Masayoshi Son, has been its CEO since its inception.

Indeed, CEO Son has been very vocal about his ambition to become a major AI player. SoftBank has already laid the groundwork for bringing its AI technology stateside via its investment in the Trump administration’s USD 500 billion Stargate AI Project, which aims to boost AI innovation in America. And the conglomerate already has its own proprietary generative AI (gen AI) subsidiary, Gen-AX Corp, which focuses on AI-powered SaaS business solutions.

One of PayPay’s existing AI innovations, according to a May press release, is adding what it calls a “self-thinking AI service” to a credit card it is issuing in partnership with Sumitomo Mitsui Card, which is currently Japan’s number one credit card in terms of market share. In the company’s own language, the feature “will provide optimal responses tailored to each customer, delivering a customer support experience that ensures the peace of mind and convenience of being able to connect at any time.”

When it comes to AI in finance, said Belday, intangibles like peace of mind matter just as much to enterprises as the tech does. “AI in payments isn’t just about speed or compliance,” she said. “It’s about building trust at scale — across borders, channels, payment rails and consumer expectations.”