Tokyo-based fintech Smartpay brings BNPL boom to Japan

Japanese fintech Smartpay has launched a new service that will allow customers to pay for goods online in installments, straight from their bank account.

Founded in June 2021, Smartpay uses Japan’s open banking ecosystem to connect consumers through a network of more than 60 partner banks across Japan. The move represents the next step for fintech, which strives to bring fast, secure and convenient financial solutions to middle- and high-income users.

The company sits at the confluence of buy-now-pay-later (BNPL) and account-to-account (A2A) transactions – two of the fintech sector’s biggest focus areas globally. The company aims to bring more payment options to consumers at checkout and digitize Japan’s economy at the same time: over 60% of transactions are currently paid in cash, the company says, citing data published by the Ministry of Economy, Trade and Industry.

Smartpay is led by experienced professionals with previous experience from Standard Chartered Bank, Facebook, Stripe, Adyen and Mastercard; it is backed by investors including Global Founders Capital, Matrix Partners and SMBC VC.

Helping consumers manage money ‘in a smarter way’

Smartpay’s founder and CEO Sam Ahmed says, “We are excited to be the first in Japan to offer digital consumer finance services that support both credit cards and direct debits through a fully automated one-click purchase user experience. Our passion is to help consumers manage their cash flow on a smarter way, with a quick, safe and secure click.

“We believe we are driving digital consumer finance to the next stage of its maturity. Buy-now-pay-later has had to grow up from the perspective of a business model, profitability and consumer value proposition.”

Ahmed believes that the app’s strong UX design is one of its biggest selling points. Smartpay spent three years analyzing the success of BNPL in other markets and building systems that would be scalable and commercially sustainable. Ahmed quotes a key retailer who describes the firm as “the Apple of digital consumer finance” and credits the design of the UX with creating a sense of trust among users.

Fintech is currently focused on Japan, Saudi Arabia and the UAE. In the medium term, Smartpay intends to expand to Singapore, South Korea and Taiwan as well as other markets throughout Southeast Asia and MENA. It says a number of factors are common among all these countries, including an economy undergoing digital transformation; a tech-savvy population; merchants who need help with digitization; and legacy banks that have been disrupted by digital-first solutions.

Ahmed continues: “Since launching Smartpay just over a year ago as Japan’s first BNPL solution that can be paid by credit card, we have continued to expand our partner ecosystem with new merchants and an expanded customer base with revenue growth of over 200% over most recently. three months. It’s interesting that we’ve lifted our sellers’ average order value by more than 30% across four different seller categories.”