The online auction house quit the Japanese market in 2002, the same year it acquired PayPal, conceding the country to Yahoo Japan.
PayPal already operates in Japan but is a minor player. Traditionally, it has relied heavily on its parent as a way to attract accounts and transactions but in Japan it will sign up individual e-commerce outfits.
According to the AP, PayPal's boss in the country, Andrew Pipolo, told a press conference in Tokyo that the firm sees "great opportunities" in Japan, the world's second largest online consumer market. The firm will look to take a slice of this by selling itself to retailers as a way to tap overseas sales.
The Japan move is part of a concerted effort to tap the Asia Pacific market. In March it vowed to double its staff numbers in the region and signed a deal with China UnionPay.
The strength of PayPal and its importance to eBay was recently underlined by the company's second quarter results, which saw the payments unit record a revenue rise of 22% to $817 million.
PayPal making belated foray in Japan, without eBay - AP