SMBC Venture Capital leads Smartpay’s USD $7m Pre-Series A
Smartpay is leading digital embedded finance in Japan — the first in Japan to offer no interest, no late fees, and free of charge installments at the point of purchase.
It provides the only checkout process with credit card or direct from a bank account that takes less than 10 seconds and with a hassle-free fully automated installment experience so consumers no longer need to visit a convenience store for installment payments or have cash ready for delivery. Consumers can also avoid the anxiety of sharing information with unfamiliar merchants.
Smartpay launched “Smartpay Bank Direct”, Japan’s first and only digital financing service that allows customers to pay for online purchases straight from their bank accounts. This service has given Japanese consumers who prefer not to pay by credit card a digital payment method that aligns to their needs and provides convenient digital financing and installments.
Smartpay is the only payment company in Japan that has signed and integrated with the 19 largest banks in Japan and over 200 credit unions thus accessible to 90% of Japan’s population with bank accounts. Smartpay Bank Direct was developed with the Japan Electronic Payments Promotion Organization (JEPPO).
At merchants that have introduced Smartpay, Smartpay users have average order value +40% higher compared to non-Smartpay users. The average order value is USD $240, 3x higher than global peers.
Japan has one of the highest website cart abandonment rates worldwide for merchants, standing at 89%, compared to the USA’s 77%. Smartpay helps the merchants by building a customer focused checkout process which provides them a higher conversion and lower cart abandonment rate on their ecommerce website.
The key issue affecting Japanese merchants is the complicated checkout experience for consumers, concerns about data sharing credit card details, home addresses and phone numbers with merchants they don’t know. Additionally, there are no free digital finance options available at the point of purchase.
For Japanese merchants, Smartpay takes all the fraud risk, which is critical as we transition to digital payments. It manages all fraud chargebacks, saving money, time, and resources for merchants. Smartpay’s integration process is fast, requiring only a day with its highest quality SDKs and APIs compared to the industry norm of two weeks. Apple Pay and Google Pay are automatically integrated into the Smartpay solution, saving merchants from costly integration resources. Additionally, Smartpay offers free e-commerce training for 10,000 Japanese merchants to learn e-commerce best practices in increasing website conversions, attracting new customers, and increasing the average order value for businesses.
Instore expansion
This week Smartpay has launched Japan’s first fully digital in-store payments with free automated installments.
Smartpay has developed new technology to enable Merchants to set up Smartpay for in-store purchases with installments in 30 seconds and without any integration cost.
Merchants can integrate through Smartpay’s newly developed Merchant App QR code scanning technology or a new technology developed by Smartpay using NFC touch. Both innovations mean consumers can easily pay in three installments at the checkout without the need for a long registration process and at the same time merchants avoid potential fraudulent behavior that exists on other in-store QR code payments. Consumers can pay with credit card or direct from a bank account in-store, same as online. Smartpay aims to grow to 2 million consumers within 2 years and 30,000 merchants within 3 years.
Comment from Merchant
“In mid-December of last year, we introduced Smartpay to Onward Closet, the official E-Commerce site of the Onward Group, in order to provide a variety of payment methods and improve customer satisfaction. The timing of the introduction coincided with SmartWeek (Smartpay cash-back campaign), and many customers immediately took advantage of Smartpay. The average order value per customer during the month of introduction was more than 1.5 times higher than other payment methods, and we feel that we were able to fulfill our customers’ desire to buy today.” Jun Morita, Manager, Customer Success Division, Innovation Group.
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