Smartpay Uses Open Banking to Streamline BNPL in Japan

Smartpay is using open banking to streamline online installment purchases for customers in Japan.

The new Smartpay Bank Direct enables customers to pay for online installment purchases from their bank accounts. It is offered through the company’s network of 67 partner banks in Japan, Smartpay said in a Monday (Dec. 26) press release.

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

This offering marks the second phase in the company’s efforts to promote digital payments in Japan — a country in which 60% of transactions are completed in cash, according to the release.

Since its founding in June 2021, Smartpay has worked to boost financial inclusion in the country by helping people who don’t have access to credit make use of BNPL, the release said.

Now, in the second phase, Smartpay is targeting middle- and high-income consumers, per the release.

Smartpay’s digital solutions appeal to high-income consumers who want to extend their monthly cash flow, seek to have better control over their spending and aim to align themselves with brands with a smart digital user experience (UX), according to the release.

“We are delighted to be the first in Japan to provide digital consumer finance services which supports both credit cards and direct debit through fully automated, single-click [user experience (UX)] at the point of purchase,” Ahmed said in the release. “Our passion is helping consumers manage their cash flow in a smarter way, in a fast, safe and secure click.”

PYMNTS research has found that Japan’s digital transformation is lagging behind that of 10 other countries that were surveyed.

While Singapore tops the list with a The ConnectedEconomy Index score of 35, Japan is far behind with a score of 14.2, which is significantly lower than even second-to-last ranked France’s score of 23.9.

This score measures consumer engagement in 40 key activities in 10 categories PYMNTS calls “pillars” of the connected economy, according to “Benchmarking the World’s Digital Transformation,” a PYMNTS and Stripe collaboration.