Smartpay has launched Smartpay Bank Direct in Japan, a digital consumer financial service that allows customers to pay online installments directly from their bank accounts.
Through a network of 67 partner banks in Japan, Smartpay Bank Direct uses Japan’s open banking system to provide convenience and security to consumers.
Smartpay was founded in June 2021 by ex-Instagram, Standard Chartered, Facebook, Stripe, Adyen and Mastercard execs from the Asia Pacific, Middle East and North Africa (MENA) region to transform the digital consumer landscape with reliable financial products and payment solutions .
Japan is the world’s third-richest country and has one of the highest credit card penetration rates in Asia, with more than 60 percent of transactions done in cash.
Smartpay to realize paperless payment system in Japan
The application of Smartpay supports the transition from a cash society to a digital society. The company’s strategy was developed in two phases. The first phase focuses on financial inclusion, helping those without access to credit join the digital BNPL economy. It also solves the use of cash and creates a platform and an ecosystem to move towards a paperless payment system.
Smartpay is entering the next stage of its digital consumer finance journey, with a focus on targeting middle and high-income users, providing them with smart financial solutions that are safe, convenient, fast and create real value for the entire ecosystem. These are low-risk and high-value customers with an average transaction amount of $200, non-performing loan (NPL) ratios below 1%, and who want to avoid bad credit ratings and defaulted debt. The monthly repurchase rate of these consumers has reached about 20%.
Sam Ahmed, founder and CEO of Smartpay, said: “We believe we are driving digital consumer finance into the next stage of its maturity. Buy now pay later must evolve from a business model, profitability and consumer value proposition perspective.
Tai Iguchi, CEO of TRiCERA, said: “When we become a major merchant, we know we are on the right track. You are the Apple of digital consumer finance, and your user experience is beautifully designed so that consumers feel that you trust them , respect them. This is in a market where other consumer finance companies make customers feel they are mistrusted and undervalued.”
Smartpay focuses on Japan, Saudi Arabia and UAE
Smartpay will initially focus on the Japan, Saudi Arabia and UAE markets, but in the medium term the company will look at Singapore, South Korea, Taiwan and other markets in Southeast Asia and the Middle East and North Africa.
Smartpay’s business model features:
- Specific consumer psychographics, including tech-savvy demographics, smartphone and Internet access, high disposable income, increased consumption, and high technology adoption rates
- Economies undergoing digital transformation
- Merchants who need help accelerating a successful digital transformation
- Traditional banks disrupted by digital-first solutions that strip them of relevance and limited access to critical consumer data
- Governments and regulators looking to work with established digital financial solutions with existing global partnerships (proof of quality and security) and reliable local partners (proof of local interest)
Smartpay has realized that the ideal customer is a high-income consumer who wants to control their monthly budget and wants to extend their monthly cash flow without paying fees and interest. These customers want to engage with brands that are customized for their use, rather than a one-size-fits-all approach for consumers who really want to borrow money. Instead, Smartpay is a brand designed for their income segment, designed for smart money management, not ‘non-savings’ money management.
Japan’s first BNPL solution that allows payment by credit card
Smartpay is backed by Global Founders Capital (Europe), Matrix Partners (Silicon Valley) and SMBC VC (Japan) as it prepares for global expansion with its Open Banking-powered solution.
“We have already started discussions with potential banking partners in other similar markets such as Saudi Arabia and South Korea to roll out our lessons learned and robust business model,” continued CEO Sam Ahmed.
“We are excited to be the first company in Japan to offer a digital consumer financial service that supports both credit cards and direct debits through a fully automated, single-click user experience at the point of purchase. Our passion is to help consumers do so in a smarter way , to manage their cash flow with a fast, secure and reliable click. Consumers pay no additional fees or interest. Since launching Smartpay more than a year ago, as Japan’s first BNPL solution to pay by credit card, we continue to New retailers and an expanding customer base expand our partner ecosystem, with over 200% revenue growth over the past three months. Interestingly, we’ve increased merchant average order value by over 30% across four different merchant categories. We attract higher value consumers for merchants through the eKYC process.”