Fintech & Money: Paidy

Summary

Russell Comer, CEO and co-founder of Paytie, introduces Paytie as a revolutionary instant postpay credit service in Japan, designed for quick and secure online shopping. Paytie offers a frictionless checkout experience using just a mobile phone number, eliminating the need for credit card details and sign-ups. It provides a seamless monthly billing system, installment repayments, and caters to over a hundred million consumers across all carriers. Comer highlights Paytie's significant impact on increasing merchant revenue, customer acquisition, and average order value, positioning it as a game-changer in the Japanese e-commerce landscape. With the recent Series C funding of $55 million, Paytie is set to expand regionally, aiming to make financial services instant and accessible.

Takeaways

• 😀 Paytie is an instant postpay credit service in Japan, offering a mobile, fast, and secure way to shop online.
• 🔐 Paytie provides an instantly issued postpay credit account linked to a mobile phone number, eliminating the need for credit cards or signups.
• 📈 Despite Japanese consumers having an average of 3.2 cards per person, nearly half of online sales are completed with cash payment methods.
• 🛒 Paytie aims to create a consumer experience as easy as cash on delivery at checkout but as powerful as a credit card afterward.
• 🏡 Paytie addresses the issue of cash on delivery by offering a service where consumers don't need to be home for transactions, unlike traditional COD.
• 💼 Paytie has shown to increase revenue for merchants by reducing transaction breakage and attracting new customers.
• 💳 Paytie offers a single monthly bill for all shopping, with the option to pay in installments, providing convenience similar to a credit card.
• 💼 Paytie is beneficial for merchants as it eliminates significant bottlenecks and assumes all payment risks, guaranteeing payments 100%.
• 🌐 Paytie is expanding its services beyond online to offline payments and is looking at regional expansion opportunities.
• 💼 Paytie has recently closed a Series C funding round, raising $55 million USD to continue its growth in Japan and potentially expand regionally.

Q & A

What is Paytie and how does it function?

Paytie is an instant postpay credit service in Japan that allows consumers to shop online quickly and securely. It offers an instantly issued postpay credit account linked to a mobile phone number, without the need for a credit card or carrier billing. Paytie is designed for easy checkout and is available to over a hundred million consumers in Japan, working on all carriers including MVNOs.

What makes Paytie unique in the Japanese market?

Paytie is unique because it combines the convenience of cash on delivery at checkout with the power of a credit card for all subsequent uses. It requires no signup, no credit card number, and offers a single monthly bill for all shopping, installment credit, and works for subscriptions and recurring billing.

Why did Paytie launch in Japan, and what is the economic context?

Paytie launched in Japan because despite Japanese consumers having an average of 3.2 cards per person, nearly half of online sales are completed with cash payment methods. This is due to cultural reasons and the inconvenience of cash on delivery, which requires consumers to be home for transactions.

How does Paytie address the issues with cash on delivery?

Paytie addresses the issues with cash on delivery by providing a frictionless checkout experience that requires no signup or credit card information. It also eliminates the need for consumers to be home for transactions, as payments are managed through a single monthly bill.

What benefits does Paytie offer to merchants?

Paytie offers merchants a significant increase in revenue, no transaction breakage, and the assumption of all payment risks. It also simplifies the refund process and can increase the average order value by providing consumers with access to additional credit.

How does Paytie enhance the consumer experience?

Paytie enhances the consumer experience by offering a frictionless checkout process, no credit information risk, and card-like convenience with a single monthly bill. It also allows for installment payments, which can be seen as an intelligent way to budget for purchases.

What is the significance of Paytie's paperless billing system?

Paytie's paperless billing system issues monthly consolidated bills via SMS and email, which can be paid at convenience stores, through bank transfer, or by linking a bank account for auto-debit. This system is environmentally friendly and provides convenience to consumers.

How does Paytie plan to expand its services beyond online payments?

Paytie plans to extend its services to include payment in the real world and other repayment options like installments. It also sees opportunities to service consumers with additional products such as insurance, working capital, and risk and fraud solutions.

What recent funding round has Paytie completed, and what are the implications?

Paytie has recently closed a Series C funding round, raising 55 million US dollars. This funding, led by a large trading conglomerate in Japan and including Goldman Sachs as a new investor, brings the total funding to date to 80 million US dollars. It implies that Paytie is preparing for significant growth and potential regional expansion.

What is the broader philosophy behind Paytie's approach to FinTech?

The broader philosophy behind Paytie's approach to FinTech is to create new consumer experiences by combining existing financial system ingredients in unique ways. It focuses on removing friction points and barriers to facilitate instant access and utility for consumers across various financial services.

Outlines

00:00

💼 Introduction to Paytie: Instant Postpay Credit Service

Russell Comer, CEO and co-founder of Paytie, introduces Paytie as an instant postpay credit service in Japan designed for quick and secure online shopping. Paytie offers a mobile-based credit account linked to a user's phone number, eliminating the need for traditional credit cards or sign-ups. It aims to simplify the checkout process and provide a seamless shopping experience, similar to cash on delivery, but with the added benefits of credit card functionality post-checkout. Paytie is available to over a hundred million consumers in Japan and operates on all carriers, including MVNOs. The service addresses the unique Japanese economy where cash payments are prevalent despite a high number of card holdings due to cultural reasons.

05:03

📈 Paytie's Impact on Consumer and Merchant Experience

The script discusses the benefits of Paytie for both consumers and merchants. For consumers, Paytie provides a frictionless checkout experience, no credit information risk, and a single monthly bill for all purchases, which can be paid through various methods including convenience stores, bank transfers, and auto-debit from linked bank accounts. Consumers can also opt for installment payments, appealing to the Millennial demographic. For merchants, Paytie increases revenue by reducing transaction breakage, simplifies refunds, and increases average order value. It also aids in customer acquisition by removing barriers associated with traditional card payments. The service is particularly effective in attracting new customers who are hesitant to use cards for initial transactions.

10:06

🌐 Expansion and Investment in Paytie's Future

Russell Comer outlines Paytie's broader strategic direction, emphasizing the company's philosophy of creating new consumer experiences by combining existing financial system ingredients in unique ways. He highlights the potential for extending Paytie's services beyond online payments to include real-world payments and other financial products. Comer also announces the closure of Paytie's Series C funding round, raising $55 million led by existing investor Itochu and new investor Goldman Sachs, bringing the total funding to $80 million. The funds will be used to continue growing Paytie's business in Japan and explore regional expansion. The company is also seeking talented individuals to join their team, reflecting their ambition to scale and innovate in the financial technology sector.

Keywords

💡Peytie

Peytie is an instant postpay credit service in Japan, which allows consumers to shop online quickly and securely. It is a mobile-based service that does not require a credit card or carrier billing, but instead offers a new credit line linked to the user's mobile phone number. The service is designed to be as easy as cash on delivery at checkout but offers the convenience and power of a credit card post-purchase. Peytie is a core concept in the video as it represents the innovative payment solution being discussed.

💡Instant postpay credit account

An instant postpay credit account is a financial service that provides immediate credit to consumers for purchases, which they can pay back at a later date. In the context of the video, Peytie offers this service, making it easy for consumers to buy online without the need for traditional credit cards or complex sign-up processes. This concept is central to understanding the convenience and innovation Peytie brings to the Japanese market.

💡Mobile fast and secure way

This phrase describes the user experience that Peytie aims to provide. It emphasizes the speed, convenience, and security of the service, which is critical for consumer trust and adoption. The video discusses how Peytie leverages mobile technology to offer a fast and secure method for online shopping, setting it apart from traditional payment methods.

💡Checkout

Checkout refers to the process of completing a purchase, typically involving providing payment information. In the video, the concept of checkout is discussed in relation to Peytie's goal of simplifying this process. Peytie aims to make checkout as easy as possible by eliminating the need for credit card information or sign-ups, using only a mobile phone number.

💡Frictionless checkout

Frictionless checkout is a term used to describe a seamless and smooth payment process that minimizes the steps required from the consumer. The video highlights how Peytie enables frictionless checkout by using only a mobile phone number, reducing the barriers to completing a purchase and enhancing the user experience.

💡Monthly consolidated bill

A monthly consolidated bill is a single bill that includes all charges from various purchases made over a month. Peytie offers this feature, which simplifies the payment process for consumers by allowing them to pay for all their purchases in one go, rather than multiple times for each individual purchase. This is a key selling point for Peytie as it provides convenience and ease of management for users.

💡Installment repayments

Installment repayments allow consumers to pay for goods or services in multiple parts over time, rather than in one lump sum. Peytie supports installment repayments, which can make larger purchases more manageable for consumers. This feature is highlighted in the video as a way to make the service more appealing and accessible to a wider range of users.

💡Merchant-side benefits

Merchant-side benefits refer to the advantages that businesses gain from using a particular payment service. The video discusses how Peytie increases revenue for merchants by reducing transaction breakage, which is common with cash on delivery methods. It also mentions how Peytie can help acquire new customers and increase average order value, showcasing the service's value to merchants.

💡New customer acquisition

New customer acquisition is the process of attracting and gaining new customers for a business. The video emphasizes Peytie's effectiveness in acquiring new customers, as it removes the friction associated with traditional payment methods. This is particularly relevant in Japan, where cash on delivery is common, and Peytie offers a simpler alternative for first-time transactions.

💡Regional expansion

Regional expansion refers to a company's strategy to grow its business into new geographical areas. In the video, it is mentioned that Peytie has closed a Series C funding round, raising $55 million to continue its growth in Japan and to explore regional expansion opportunities. This highlights the company's ambition to scale its innovative payment solution beyond its home market.

Highlights

Introduction of Paytie, a new payment method for online stores in Japan.

Paytie is an instant postpay credit service, different from mobile wallets and carrier billing.

No sign-up or credit card information is required for Paytie, just a mobile phone number.

Paytie offers installment repayments and is available to over a hundred million consumers in Japan.

Despite having multiple cards, many Japanese consumers prefer cash payment methods for online shopping.

Paytie aims to create a checkout experience as easy as cash on delivery but with the power of a credit card.

Paytie's design philosophy focuses on removing steps from existing consumer behavior.

Paytie provides a single monthly bill for all shopping, making it easier for consumers.

Paytie increases revenue for merchants by reducing transaction breakage.

Paytie is effective in acquiring new customers and increasing repeat buying.

Paytie offers a frictionless checkout experience with no sensitive information involved.

Paytie's paperless billing system issues monthly consolidated bills via SMS and email.

Consumers can choose to pay in installments, which is popular among Millennials.

Paytie eliminates merchant bottlenecks and assumes all payment risks.

Paytie increases average order value by providing new credit to consumers.

Paytie is the top payment method for new customers in Japan.

The broader FinTech philosophy is about creating new consumer experiences by combining existing financial system ingredients.

Paytie is planning to expand its services beyond online payments.

Paytie has closed its Series C funding round, raising $55 million for growth and regional expansion.

The opportunity for Paytie is significant, with potential beyond Japan.

Paytie aims to make financial services instant and accessible.

Paytie is looking for talented people to join their team.

Transcripts

a new way for consumers to pay at online

stores sharing how they allow consumers

to buy online quickly and safely welcome

peytie CEO and co-founder Russell comer

Russell over to you thanks everybody

okay great so I don't know if eight

minutes is gonna be long or short for

this so let's hope you'll bear with me

and we go through so as Charles Kyle I

said I'm Russell I'm the co-founder and

group CEO of padey padey is an instant

postpay credit service in Japan what

does that mean so meet padey padey is a

mobile fast and secure way of shopping

online and that will at some point be

extended to shopping in the real world

as well it is an instantly issued

postpay credit account linked to your

mobile phone number it is not carrier

billing it is not a mobile wallet is an

entirely new incremental credit line

that we issue to consumers it's easy

checkout with your mobile number

there is no sign of required we will

touch on this a little bit later in this

in the speech but our philosophy from a

product standpoint is FinTech is really

all about creating new consumer

experiences and oftentimes a new

consumer experiences removing steps from

existing behavior so there is no sign up

for peytie

there's no card number for peytie

there's nothing to do you just use your

mobile phone number and you're ready to

go

so no credit card is ever required

peytie is the credit account we offer

installment repayments it's available to

over a hundred million consumers in

Japan and it works on all carriers

including MVNOs

when we look at the macro-environment in

Japan the reason that we launched a

service like KT is that there are some

very unique things in the Japanese

economy despite Japanese consumers

having 3.2 cards per person on average

nearly half of online sales are

completed with a cash payment method

like cash on delivery prepayment post

payment by invoice and there's also to

be interesting cultural reasons for that

so

what we've tried to do with patty is

create a consumer experience that is as

easy as cash on delivery at checkout but

then is as powerful as a credit card

every moment thereafter what does that

mean if I do cash on delivery a checkout

I don't need to input anything

there's no card number there's nothing I

just say Co D and I'm done equally I

don't sign up to use Co D right so patty

has kept all of those as key features

there's no signup for patty there's no

secret card number it's just your phone

number however cash on delivery is

extremely troublesome

at every moment after checkout you need

to be home if you're not home the

transaction breaks that's terrible for

merchants as well so what we've tried to

do is combine the best of both worlds in

our product design at checkout it's as

easy as CEO D at every moment thereafter

it's as powerful as a credit card and

what do I mean by that I mean we have

full feature parity so it's a single

monthly bill that you pay once for all

of your shopping it has installment

credit it works for subscriptions and

recurring billing works with digital

contents and it's unique in the market

in Japan on the merchant side there is a

tremendous increase in revenue that

comes from this

there's no breakage as there would be

for up to 45 percent of their business

if they were relying on Co D katie has

proven amazing again getting new

customers you can understand the the

consumer doesn't need to do anything

that is terribly troublesome to checkout

they just input their phone number and

they're good to go

and we see same stores same month repeat

buying is significantly higher with

peytie consumers than with other

consumers on the consumer side

frictionless checkout as we've touched

on no credit info risk there is nothing

in the transaction that is sensitive or

can be stolen there's you know there's

just a phone number as a credential

between us and them and then card like

convenience a single monthly bill if you

do Co D 10 times in a month you have to

wait at home 10 times to pay ten times

if you shop with pay T ten times in a

month or a hundred times in a month

there's just a single bill to settle

which is quite unique in our market

so the bills are simple and easy to pay

pay T is entirely paperless so we issue

your monthly consolidated bill by SMS

and email it can be paid nationwide at

more than a hundred thousand convenience

stores or by bank transfer or paperless

Lea consumers can link their bank

account so that it auto debits all of

their monthly activity and again

uniquely you you don't need to settle

all of your balance at once we're very

happy to allow consumers to split their

purchases into installment payments over

time which Millennials in general have

have an interesting reaction to we're

you know split purchase is seen as a

sort of an intelligent way to do some

budgeting on the merchant side we

eliminate significant merchant

bottlenecks

there is no breakage peytie assumes all

of the risk and guarantees payments to

the merchant 100% exactly analogous to

accepting credit cards equally because

we have this ongoing relationship with

the consumer it's very simple to do a

refund to do a refund to a peytie

consumer in a way that is not true for

other non card payment methods again

back to the example of cash on delivery

if you if you return goods that were

purchased on cash on delivery it's not

like the delivery guy comes back takes

your sneakers and gives you the money

there's this entire chain of fulfillment

and finance logistics that need to

happen to reverse that transaction with

patty it's instant it's exactly the same

as a credit card through the pay tapi

charges can be reversed and the merchant

can go and process the flow exactly as

they would for a credit card

peytie also has proven to increase

average order value patty is

incrementally new credit that's being

issued to consumers so consumers are

able to take advantage of that to

purchase more than they would if they

were confined to the cash that they have

on hand to do a cash on delivery

transaction and last but not least patty

is amazing at new customer acquisition

again if you look in Japan

the number one payment method actually

for new customers

despite the

that everybody in Japan has credit cards

is cash on delivery

there is reluctance to use a card in an

initial transaction with the merchant

you don't know if the if you like the

goods you don't know how well the

merchant is going to take care of your

information it feels in the context of

our market in Japan much simpler to just

go ahead and do a cash-on-delivery

transaction peytie removes all of those

barriers right there is no associated

friction of having to input a card

there's no mental burden of worrying

about security and equally there's no

need to be committed to being at home at

a certain period of time in order to

complete the transaction so PT is great

for getting first-time consumers at all

of the merchants that we see across the

payday Network peytie tends to be either

the number one payment method for new

consumers or has the largest share of

new consumers amongst payment methods

okay so that's paddy I sort of the

mandate for the growth summit is to

speak a little bit about broader broader

trends and broader philosophy so I

touched on this before our philosophy is

really that FinTech is not about

creating necessarily anything new it's

about combining the existing ingredients

that exist in the financial system in

unique ways to create new consumer

experiences so if you look at actually

specific to Paddy what we have done is

everybody already understands ecommerce

and shopping everybody understands

checking out with a credential it could

be a credit card number or something

else everybody understands monthly

consolidated post pay installments you

know recurring billing all of that what

what we have done is we've identified

that actually removing the signup and

all of the other all of the other

friction points as much as possible in

order to facilitate the use of pay T and

in particular a first use of pay T is

really what's become our unique value

out in the market and allowed us to

scale as rapidly as we have so again you

know pay T is all about instant credit

and I think that that's really important

and again FinTech should really be

unique

the other trend that we wanted to touch

on as well again with the mandate of the

growth Summit stage I think it's really

fascinating to see that actually there

is an aspect whereby as you start to as

you start to scale any sort of service

where you have a trusted relationship

with consumers there there is an

opportunity as grab touched on at the

opening session with grab platform as

I'm sure you'll hear from various

different people throughout the

remainder of the conference today there

is this this trend which is starting

with one set of services and in our case

it's instant post paid credit but that

customer relationship actually should be

served across other different either

form factors in the case of payments so

for example extending to payment in the

real world or other repayment tights

like we do with the multi pay

installment but then you can obviously

see that extension like simple insurance

and these guys do where you can actually

service this same customer with an

insurance product on the merchant side

obviously Square Capital and some of the

other work that stripe and other folks

are doing to provide working capital in

addition to what they're doing on the

payment side risk and fraud solutions

and you know on online offline so I

think that these are themes that

certainly are playing out in the

strategic planning that we're doing with

patty but are actually broader themes in

the market that that I think are worth

touching on and again as I say we're

following this trend you know you'll

you'll see in the coming in the coming

quarters and years on our side we see

real opportunities to service consumers

in the peytie way right frictionless

removal of whatever is the the

problematic barrier be it either mental

or actual mechanics of how to opt in or

take advantage of services we want to

continue to extend that philosophy

across other other use cases and other

products for our consumers at the same

time as growing our existing

acceptance network online and offline in

the real world given that this is a

conference would just spend ten seconds

to say two things the first is obviously

we've been very lucky to have support

from great investors to build Patti up

to the stage where we are now and as we

get ready to go and enter into our next

stage of growth you know we are actually

announcing today that we've closed our

Series C so we're raising 55 million US

dollars to continue the growth of our

business in Japan and with a view to

also some regional expansion we were

very gratified that that round was led

by a toe chew so we taught you is a very

large trading conglomerate in Japan that

was one of our existing investors and

then we've also added Goldman Sachs as a

new investor in this round it brings our

total funding to date for peytie to 80

million I think the opportunity is very

very big for what we're doing I don't

think it's limited to Japan I think this

philosophy of creating instant

gratification instant access instant

utility to consumers is really what's

been missing in finance right think

about the last time you signed up for a

credit card think about the last time

you bought insurance the utility is

there but it isn't instant and the

peytie way is to really make it as

instant as possible across as many

different as many different pain points

as we can identify for our consumers and

last but not least it's very important

for a scaling company we would love to

have talented people come and join us so

that's our careers website so please

check us out thanks again your us gonna

show us

you

[Music]