" class="no-js "lang="en-US"> Japanese fintech leader Smartpay first to launch the next phase of digital consumer finance through open banking
Wednesday, February 08, 2023
Saltedge Report

Japanese fintech leader Smartpay first to launch the next phase of digital consumer finance through open banking

Japan-based fintech Smartpay has launched Smartpay Bank Direct, the country’s first digital consumer finance service that allows customers to pay for online installment purchases straight from their bank accounts. Smartpay Bank Direct emphasizes user security while delivering convenience for the consumer, through a network of 67 partner banks across Japan[1]. Smartpay is Japan’s first digital consumer finance company to utilize Japan’s open banking system.

Smartpay was founded in June 2021 by seasoned industry professionals who had previously held leadership roles in Instagram, Standard Chartered Bank, Facebook, Stripe, Adyen and Mastercard across the Asia Pacific, and Middle East, and North Africa (MENA) regions. The founding team has worked in digital payments, banking, and fintech which gives the company the right talent to transform the digital consumer landscape for users seeking reliable financial products and payment solutions. They also have experience of working with regulators and central banks which is crucial when building a financial ecosystem.

While Japan remains the third wealthiest country in the world, it has one of the highest credit card penetration rates in Asia, with over 60% of transactions completed in cash[2].

Smartpay’s application has received wide acceptance from consumers and merchants that prefer beautifully uncomplicated digital payments, which 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 that would be more efficient.

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.

Smartpay’s founder and CEO Sam Ahmed 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.”

The company’s adaptive UX, accessible technology, eKYC (electronic know your customer), dependable security features and sound business model is built for users that have a need for efficient digital finance solutions, which will transform markets with similar conditions, high inflationary pressures on consumer psychographics, and demographics.

High-income consumers who want to extend their monthly cash flow with smart, digital point-of-purchase, cash flow management tools, and who want to have a better control over their month spending, have been most receptive to Smartpay’s digital solutions.

From its inception, Smartpay has attracted globally renowned strategic investors that include Global Founders Capital (Europe) , Matrix Partners (Silicon Valley) and SMBC VC (Japan) .

The plan is to build on these strong foundations, and with the right technology and back-office support, each market brings a better overall ROI due to shared costs and higher overall returns, a high-tech, low-asset operations business. Smartpay’s founder and CEO Sam Ahmed added, “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.”

Regarding his company’s business strategy and future plans, Smartpay’s founder and CEO Sam Ahmed said, “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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