Smartpay – first fintech to utilise Japan’s open banking system

Smartpay is Japan’s first digital consumer finance company to utilise Japan’s open banking system. With its smart solutions, it provides the first all-in-one payment experience and interest free BNPL solution built to solve Japanese consumer payment issues and improve merchant conversion rates.

The Japan-based fintech has launched Smartpay Bank Direct, the country’s first digital consumer finance service that allows customers to pay for online instalment 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 [as of Dec 27, 2022].

Japan remains the third wealthiest country in the world and has one of the highest credit card penetration rates in Asia. According to Japan’s Ministry of Economy, Trade and Industry, June 1, 2022 over 60% of transactions are completed in cash.


                                                                                                             Sam Ahmed, Founder & CEO


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.”


Efficient Digital Solutions

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.

Its aspirational feel and product features appeal to the high-income segment who have disposable incomes and want to align with smart digital UX brands. The UX design features make consumers feel trusted and accepted for their unique individual traits, instead of being thrown into a mass-made product that does not distinguish between customers.

By targeting this segment of society, Smartpay’s unit economics works well as 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%.


The Business Model

The company’s focus is currently on Japan, KSA and UAE markets however in the medium term, Smartpay will look towards Singapore, South Korea, Taiwan, and other markets in Southeast Asia and MENA. These markets all have the five common factors which are central to Smartpay’s business model:

  • 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)

What differentiates Smartpay from other fintech companies is that it works with the existing legacy banks rather than against them. Established banks have been disrupted by financial digital transformation companies that have taken their customers’ relevant details and data. These banks need help in recapturing these consumers with payment innovation and high-quality, digital UX.

In the past decade, the legacy banks fell behind the innovation curve with respect to payments, and often focused on wealth management and insurance products targeted almost solely towards high-net-worth individuals. However, payments represent the fundamental basis of a bank’s daily relationship with their consumer.

When fintechs took over payments, they not only took away the transaction values, but also the critical data that had guided the customer acquisition strategy of banks for decades. Without these insights, the legacy banks had to rely on high acquisition cost for insurance and wealth management, which affected their profitability because they were missing the key relevant data to offer the right products and services at the right time. Smartpay is able to address this imbalance and seamlessly integrates with legacy banks to re-establish their relationship with the right customer through a beautifully designed digital UX.


Future Plans

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.”

He added, “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.”


Source: picture Smartpay