Smartpay launches consumer finance service in Japan, Saudi Arabia, and UAE

Rick Steves

Smartpay has launched Smartpay Bank Direct, a digital consumer finance service in Japan that allows customers to pay for online installment purchases straight from their bank accounts.

Through a network of 67 partner banks across Japan, Smartpay Bank Direct delivers convenience and security for the consumer by using Japan’s open banking system.

Founded in June 2021 by former executives of Instagram, Standard Chartered Bank, Facebook, Stripe, Adyen, and Mastercard across the Asia Pacific, and Middle East, and North Africa (MENA) regions, Smartpay seeks to transform the digital consumer landscape with reliable financial products and payment solutions.

Japan is the third wealthiest country in the world and has one of the highest credit card penetration rates in Asia, with over 60% of transactions completed in cash.

Smartpay to bring about paperless payment system in Japan

Smartpay’s application supports the transformation of a cash-based society into a digital one. The company’s strategy was built in two phases. The first phase was focused on financial inclusion, and helping those that don’t have access to credit, to join the digital BNPL economy. It also solved the issue of cash usage and created a platform and an ecosystem to move towards a paperless payment system.

Smartpay is moving into the next phase of its digital consumer finance journey, which is focused on targeting middle and high-income users and offering them 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 average transaction value of USD200, non-performing loan (NPL) rates of less than 1%, and who want to avoid a bad credit rating and nonpayment on debt obligations. The monthly repeat rate of these consumers has already reached approximately 20%.

Sam Ahmed, Founder and Chief Executive Officer at Smartpay, said: “We believe we are driving digital consumer finance to the next phase of its maturity. ‘Buy now, pay later’ has had to grow up from the prospective of a business model, profitability, and consumer value proposition.

Tai Iguchi, Chief Executive of TRiCERA, said: “We knew we were on the right track when our key merchant. You are the Apple of digital consumer finance, your UX is beautifully designed and makes the consumer feel like you trust them, and respect who they are. This is in a market where other consumer finance companies have made customers feel they are not trusted and undervalued.”

Smartpay to focus on Japan, Saudi Arabia, and UAE

Smartpay will first focus on Japan, Saudi Arabia and UAE markets, but over the medium term the firm will look towards Singapore, South Korea, Taiwan, and other markets in Southeast Asia and MENA.

Smartpay’s business model features:

  • Specific consumer psychographics which include a tech savvy population, smartphone and internet access, high disposable income, increased consumption, and high rates of tech adaption
  • An economy that is undergoing a digital transformation
  • Merchants that need help to accelerate a successful digital transformation
  • Legacy banks that have been disrupted by digital first solutions which have taken away their relevance and limited access to key consumer data
  • Governments and regulators that want to work with established digital financial solutions that have existing global partnerships (proof of quality and security) and credible local partners (proof of local interests)

Smartpay has realized that the ideal customer is a high-income consumer that wants control of their monthly budgeting and wants to extend the monthly cash flow without paying fees and interest. These customers want to engage with a brand that is custom built for their usage instead of a one-size-fits-all approach that is for consumers who actually want to borrow money. Instead, Smartpay a brand that is designed for their income group, and designed for smart money management, versus “non-savings” money management.

Japan’s first BNPL solution payable by credit card

Smartpay is backed by Global Founders Capital (Europe), Matrix Partners (Silicon Valley), and SMBC VC (Japan) as it prepares global expansion with its solution powered by open banking.

“We have begun discussions with potential banking partners in other similar markets, such as KSA and Korea, to roll out our learnings and robust business model”, chief executive Sam Ahmed continued.

“We are delighted to be the first in Japan to provide digital consumer finance services which supports both credit cards and direct debit through a fully automated, single-click UX at the point of purchase. Our passion is helping consumers manage their cash flow in a smarter way, in a fast, safe and secure click. There are no additional fees or interest for the consumers. Since the launch of Smartpay just over a year ago, as Japan’s first BNPL solution payable by credit card, we have continued to expand our partner ecosystem with new retailers and an expanding customer base with revenue growth over 200% in the last three months. It’s interesting that we have lifted merchant average order value more than 30% in four different merchant categories. We attract higher value consumers for the merchant through our eKYC process.”

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