Author: dominiquef09

Baobab+ Unleashing the Potential of Senegal with PAYG Smartphone.

Baobab+ a subsidiary of Baobab Group, is a leader in digital and financial inclusion and is a social business committed to providing access to energy and digital. Baobab+ commercialize innovative products with financing solutions that meet the needs of local populations in Africa. In partnership with PayJoy, Baobab+ is now unleashing the potential of Senegal by making incredible Smartphones accessible through a PAYG offer which now makes Smartphones accessible to all.

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For more information on PayJoy, visit www.payjoy.com. Join the smartphone financing conversation by visiting the PayJoy blog, Twitter, LinkedIn and Facebook pages.

For more information on Baobab+, visit https://www.en.baobabplus.com and Facebook pages.

Enabling Powerful Smartphone Subsidies

India’s feature phone shipments grew faster than smartphone shipments for the very first-time in 2018 thanks in part to an innovative finance program

According to the latest research from Counterpoint’s Market Monitor service, in 2018, India’s overall mobile phone shipments grew 11% and smartphone shipments grew 10% with feature phones growing faster than smartphones (11%) during the year for the first time ever, driven by the Jio Phone. Reliance Jio was the overall market leader across all handset types in 2018, with a market share of 21% and captured 38% of the feature phone segment in just over a year with its compelling value proposition compared to normal 2G feature phones. This was also recently covered in the WSJ.

Source: Counterpoint Research Market Monitor 2018

Reliance Jio’s compelling value proposition

The JioPhone was launched in July 2017 by the Indian mobile network operator Reliance Jio and was the first affordable 4G VoLTE smart feature phone, powered by KaiOS. The JioPhone, introduced as “India ka Smartphone” was launched at a so called “effective price” of Rs. 0 ($0). However, this was not exactly true. Consumers had to pay a security deposit of Rs 1,500 ($21.60) which was refundable if they returned the phone in 3 years and only if they paid for a Reliance Jio plan during the 3 years. Total cost to the consumer was Rs 6,000 ($86.40) or Rs 4,500 ($64.80) if the device was returned so certainly not free! Reliance Jio has certainly created a compelling value proposition that has been profitable for the company and gotten consumers access to the products they want. According to Counterpoint, half of the more than 100 million subscribers added since the launch of the JioPhone was thanks to this feature phone. Reliance Jio has changed the mobile economy in India by essentially creating a Post-Paid for Pre-Paid plan that tied customer loyalty to the mobile network operator.

The challenge in extending credit in emerging markets

The fundamental challenge mobile network operators or any company for that matter has in extending credit in emerging markets to purchase a smartphone – is the lack of collateral and underwriting data which is why Reliance Jio requires a security deposit and offers the lowest cost 4G handset possible. Mobile network operators would do better if they were able to find a way for consumers to pledge their smartphone as collateral. This would allow mobile network operators to offer better smartphones with little or no security deposit or perhaps even subsidized if the consumer agreed to a minimum mobile service recharge rate per year.

Extending credit by leveraging innovative technologies

PayJoy gives mobile network operators and finance companies a tool to collateralize smartphones that aren’t just the lowest cost phones. With our patented Lock technology, which resists any efforts to be deleted from the mobile device until the subsidy is recovered, we can increase recharge repayments and minimize the risk of late or defaults. We have developed a user experience on our lock that helps customers to track and make their recharge payments seamlessly via the app. When users are late on a recharge payment, they don’t get charged any late fees. Instead the PayJoy Lock limits their app and call functionalities until they make their recharge payment, and instantly restores normal phone functionalities. Through this new “Recharge” form of device subsidy that mirrors the “pay as you go” solar distribution model, we enable users to afford getting a smartphone by using it as collateral, and we enable operators to onboard the next billion users to smartphones and full connectivity.

A New Model Powered by PayJoy

Below is a sample of the kind of model that could be powered by the PayJoy Lock.

5.5″ Full View display
5MP rear camera, 5MP Front Camera
1GB RAM, Quad-Core Processor
Android™ 8.1 (Go edition)
Standard unlocked price: $80
PayJoy Locked price: $30
Recharge: $4.5/1.5GB for 12 months

For more information, visit www.payjoy.com. Join the smartphone financing conversation by visiting the PayJoy blog, Twitter, LinkedIn and Facebook pages.

Written by Dominique Friedl, GM PayJoy Africa and Jenny Jin, Senior Product Manager

PayJoy Lock lifecycle end to end

By Jaideep Mirchandani and Dominique Friedl

In previous PayJoy blog posts, we highlighted the problem in lending to the underbanked and underserved and how PayJoy technologies are now helping to solve this problem.

In this post, we’ll talk about how Lock and Access come together to serve these underbanked and underserved consumers. We’ll give an example of how this has worked with a partner in Africa who has a truly end to end integrated consumer journey.

A lifecycle view to enable device financing

Let’s start with the consumer. Once the consumers’ ability to pay has been assessed and they have been approved for a phone on finance (installments), the PayJoy Lock app is installed on their new device, typically by a store clerk. To enable and activate the financing and credit lifecycle, the Finance Partner configures and manages the financed device using the PayJoy Lock API service.

A critical feature of the PayJoy Lock is ensuring that the Lock is secure so that phone finance is both practically and economically viable for the partner, meaning the partner is comfortable that the Lock is easy to set up, works reliably and fosters a strong repayment behaviour. This ultimately starts with the device manufacturer (OEM). OEMs either have built-in device management or they use PayJoy Access to make setup as secure and simple as possible. Briefly, Access is PayJoy’s firmware product which OEMs optionally use to enable automatic setup (“provisioning”) and device management to enable PayJoy’s Lock to work “out of the box” to minimize the number of steps for the user and store clerk to get started. There is a tradeoff between using PayJoy Access and OEM device management. Access is built from the ground-up for phone financing, meaning that it minimizes the number of steps during setup and can provide added security guarantees but the OEM is also required to integrate into their manufacturing processes. To make this step easier, we partnered with key mobile SOC partners like Qualcomm to offer faster integration of PayJoy Access for differentiated devices with improved time to commercialization.

The Lock lifecycle

After the capabilities are baked-into the device, PayJoy’s Lock API enables the finance partner to fully implement the lifecycle to serve the consumer. Deployment of the PayJoy Lock API at scale requires the partner to integrate the Lock into the partner’s business systems which may require additional considerations and setup. Here, PayJoy, provides an end-to-end launch process to help guide a partner’s technical team to integrate and launch Lock API effectively and efficiently.

Functionally, the API allows partners to:

  • Register and take ownership of a device
  • Lock a device at a particular time if payment is not made
  • Permanently unlock a device after it is fully paid

Partners call the PayJoy Lock API to control specific devices; these changes are then propagated from PayJoy servers to the device asynchronously.

Disclosures and Consumer Privacy

We realise that protecting consumer privacy is crucial. At each step of the way, the user is informed and requested for consent both by the Store Clerk but also by the PayJoy software. Just like all Android smartphone apps, Payjoy adheres to the Android permissions model to ensure transparency and customer controls.

Making it easy to customize the PayJoy app experience

Using the Lock API Dashboard a partner can customize the following features of the Lock without any code needed:

  • In-app personalized company logo
  • Whitelisted numbers that users can access (such as Customer Support) when their Lock is enforced
  • Whitelisted apps that users can access when their Lock is enforced
  • Whitelisted IPs for direct server to server API calls
  • Payment Page URL which can embed the partner’s payment page so users can pay directly

A case study – d.light in Africa

Recently, d.light, a global leader and pioneer in delivering affordable solar-powered solutions saw the opportunity to leverage its leadership in PAYG solar and offer smartphones on a pay-as-you-go basis. With d.light’s proven ability to finance and distribute devices, they implemented PayJoy “soup to nuts” to ensure the most secure and most streamlined experience possible for their consumers and merchants.

Specifically, they:

  • Preloaded app – Simple, secure setup using PayJoy Access with a pre-loaded PayJoy Lock. This minimizes data downloads for the consumer and makes the setup process smooth.
  • Ensured commercial-grade Android compliance – d.light devices have successfully passed Google’s Android Compatibility Test Suite (“CTS”), meaning that it is certified as “commercial-grade” per the CTS website.
  • Successfully integrated Lock into the point of sale and financing lifecycle – They successfully used PayJoy Lock API to implement point of sale and setup. This minimizes the number of steps for their store clerks and users in the store, which means fewer errors and a more satisfied user.
  • Successfully integrated Mobile Money to manage devices through the financing and credit lifecycle.

Initial results are positive and as such d.light are rolling out more broadly across the market. Along with the above, strong technical foundation, d.light will deploy their proven team of sales clerks and customer support staff to successfully support consumers with smartphone finance.

We look forward to many satisfied users benefiting from this joint ecosystem effort!

For more information, visit www.payjoy.com. Join the smartphone financing conversation by visiting the PayJoy blog, Twitter, LinkedIn and Facebook pages.

Pay-As-You-Go, from solar kits to smartphones

Can the mobile industry and ecosystem players learn from an industry that has proved its solid technology foundations, high demand and low-income customers’ ability to pay for credit?

Energy poverty is a development challenge that traditional, centralized approaches have been slow to overcome. Globally, 1.1 billion people remain without access to electricity, including 589 million in Sub-Saharan Africa. Alternative energy sources such as solar have existed for decades, but their upfront costs have been unaffordable for most low-income customers, with the vast majority unable to access the credit necessary to extend repayment over time.

The expansion of digital finance systems in the developing world has altered this financial context and enabled new business models that rely on small, regular payments. In the off-grid energy sector a group of solar companies, primarily in East Africa and South Asia, are leveraging digital finance and locking technologies to offer pay-as-you-go (PAYG) energy.

How PAYG solar works

PAYG businesses rely on distributed energy sources where energy is generated at the point of consumption, in the case of PAYG solar, from a photovoltaic panel on the customer’s roof. Products range in size from $150 to $300 small home systems. Customers pay a fixed amount ($25) upfront to receive the product, and then make small, routine payments ($0.40 per day) over time (12 months). PAYG solar units contain hardware that allows the seller to remotely lock or unlock the unit, based on receipt of payment. Once the customer’s prepaid use is completed, the solar device automatically shuts off until the next payment is made. Payment schedules are relatively flexible, allowing households to pace the use of energy according to their cash flow and ability to pay.

From the provider perspective, the ability to remotely activate/deactivate the solar device based on payment significantly reduces the risk of default and theft. This added security allows PAYG providers to offer consumer financing in one of two forms: energy as an asset, where the customer pays off the solar unit over 3–36 months and takes ownership when repayments are complete, or energy as a service, in which the customer signs a long-term lease with lower monthly payments and no intent to own. In this case, assets are upgraded or replaced over time.

PAYG solar success

The model has proved its solid technology foundations, high demand and low-income customers’ ability to pay for clean energy and this can be seen in the strong performance of the PAYG solar market. According to the latest figures announced by GOGLA and The World Bank Group’s Lighting Global program in their first half of 2018 Global Off-Grid Solar Market Report, 3.66 million off-grid solar products were sold globally in the first half of 2018 of which 2.93 million have been sold on a cash basis ($107.50 million value) and 730 000 via PAYG business models ($110.89 million value). The GSMA M4D Utilities estimate that global PAYG solar sales have increased six-fold in the last three years.

Pay-as-you-go for smartphones

The PAYG solar model is also a perfect example of the second wave of inclusive digital innovation impacting lives around the globe. Emerging from the convergence of innovations around the Internet of Things, cloud computing and mobile financial services, these new service delivery models provide flexible payment terms while collecting intelligence on users and the systems they are using, creating a credit history through mobile payments for customers with no formal financial history.

PayJoy gives mobile network operators and finance companies a tool to collateralize smartphones that aren’t just the lowest cost phones. With our patented Lock technology, which resists any efforts to be deleted from the mobile device until the loan is recovered, we can increase payments and minimize the risk of late or defaults. We have developed a user experience on our lock that helps customers to track and make their payments seamlessly via the app. When users are late on a payment, they don’t get charged any late fees. Instead the PayJoy Lock limits their app and call functionalities until they make their payment, and instantly restores normal phone functionalities. Through this new “pay as you go” form of device finance that mirrors the “pay as you go” solar distribution model, we enable users to afford getting a smartphone by using it as collateral, and we enable finance companies and operators to onboard the next billion users to smartphones and full connectivity.

African countries will continue to experience a degree of volatility due to factors such as currency and economic and political instabilities, lack of locally relevant content and technical literacy and affordability. However, innovative technologies and solutions like that of PayJoy can lead to the next African smartphone boom in the longer term. Indeed, market researchers project an increase in the availability of low-cost devices in the region could add a further half a billion smartphone connections by 2020.

However, the time has certainly come to redefine low-cost devices to that of making the purchase price more manageable through financing, an area in which PayJoy is leading the market in Africa and globally.

For more information, visit www.payjoy.com. Join the smartphone financing conversation by visiting the PayJoy blog, Twitter, LinkedIn and Facebook pages.

Written by Dominique Friedl, GM Africa and Jenny Jin, Senior Product Manager

Breakthroughs in affordability unleash smartphone growth in Africa

Innovative technologies like the PayJoy Lock are likely to lead to the next smartphone boom on the continent.

The last few years have been tough for smartphone shipments in Africa. However, according to the most recent figures announced by International Data Corporation (IDC) in 2018, Africa experienced year-on-year growth in smartphone shipments for the first time since 2015. The global technology research and consulting firm’s Quarterly Mobile Phone Tracker report shows the African smartphone market grew a modest 2.3% in 2018 to a total 88.2 million units, spurred by the strong performance of the continent’s three biggest markets – Nigeria, South Africa and Egypt.

Looking ahead, IDC expects Africa’s overall smartphone market to grow 5.4% year on year in 2019, to a total 92.9 million units, stimulated by the introduction of more affordable devices in the African market, which will help drive progress in this space over the coming years.

We often hear about high-growth markets like India, Indonesia and Vietnam, which are forecast to show growth in smartphone shipments in 2019. Growth in Africa should theoretically be significantly higher due to the relatively low base for smartphone and mobile internet penetration, which, as of the end of 2018, was just 33% and 38% respectively.

What are the main factors constraining the acceleration of smartphone adoption in Africa?

In many countries, macroeconomic factors are to blame for some of the smartphone industry stagnation. Nigeria, for example, experienced an economic downturn and a shortage of foreign exchange, which impacted sales of imported products, including smartphones. South Africa also slipped into a technical recession in 2018, as the economy shrunk for two consecutive periods.

According to the GSM Association (GSMA), a trade body that represents the interests of mobile network operators worldwide, affordability still represents a significant barrier to the uptake of mobile services in the region, with the total cost of mobile ownership (TCMO) determined by the cost of service usage (voice, data, SMS), activation and mobile handset. Countries in Sub-Saharan Africa have among the highest level of TCMO as a proportion of income worldwide; this is particularly pronounced for those at the bottom of the income pyramid. For the 27 countries in the region where data is available, the TCMO for purchasing a handset and 500MB of data per month represents on average 10% of monthly income, well above the 5% threshold recommended by the UN Broadband Commission.

According to PayJoy’s own market analysis and affordability ratio, on average, the price of the cheapest smartphone represents 63% of monthly income. In 33 of 41 African countries, the price over income ratio is higher than 20%. In Nigeria, for example, the average selling price of an entry level smartphone is $65 while the GNI per capita is $173 per month, which represents an affordability ratio of 38%.

With some sense of normality returning to economics across Africa and affordability somewhat improving, what will help the smartphone industry prosper in the next few years?

For one, industry leaders are expected to increase their focus on putting affordable smartphones in more people’s hands as mobile subscriber penetration approaches saturation levels across Africa. This focus on smartphones, in turn, will help boost data revenues for network operators in a market where voice revenue growth has flatlined.

According to Jumia, Nigeria and Kenya’s leading ecommerce platform, the average selling price (ASP) of smartphones continues to fall year on year in most markets across Africa: smartphone average prices across Africa were $95 in 2018, down from $99 in 2016 and down from $165 in 2014.

Source: Kenya Mobile Report 2019

The smartphone industry in Africa has remained a truly competitive landscape over the years, with Chinese brands dominating the African markets with their strategy of introducing lower price points specifically for the profiles of African users. However, that said, it’s evident that the year on year reduction in average selling price (ASP) of smartphones is slowing significantly and with the enhancement of technologies like displays, cameras and 4G/5G technologies, one could expect the ASP’s to start increasing again, as they have globally.

Other factors that could help bring the cost of devices down for consumers:

  1. The availability of Android Go, a streamlined version of the Google mobile operating system.
  2. The rise of the “Smart Feature Phone” powered by KaiOS, a new class of mobile device.

Android Go was designed for low-power devices (Chipset & Memory), and the operating system will enable handset manufacturers to ship smartphones that while not as full-featured as a flagship device, still offer a reliable and responsive end-user experience well suited to the African markets. Android Go is Google’s new product for the next billion users.

MTNSPThe Smart Feature Phone was originally introduced in July 2017 by the Indian mobile network operator Reliance Jio. The JioPhone, as it was named, was an affordable 4G smart feature phone, powered by KaiOS. The price announced for it is $0 with a security deposit of $21 which can be drawn back by the user by returning the JioPhone at Jio stores only after three years. More recently, South African mobile network operator MTN announced the introduction of their own Smart Feature Phone. The MTN Smart Feature Phone is a 3G non-touch screen device that runs on KaiOS and has the following apps: WhatsApp, Facebook, Twitter, YouTube, Google Maps, MyMTNApp, FM Radio and Google Assistant. The MTN Smart Feature Phone sells for about $22 with 500MB of data included for six months. MTN CEO Rob Shuter said it’s a “wonderful bridge device” for the vast number of Africans who still use feature phones because they cannot afford smartphones. While this may be a “wonderful bridge device” or a device to bring people online for the first time, one can’t help but wonder if too much has been sacrificed in user experience to achieve affordability. Time will tell!

There is certainly ample opportunity for the mobile industry and ecosystem players to improve smartphone affordability in emerging markets like Africa and to borrow from a prominent financial institutions tagline, the time is now right for some “Solutionist Thinking”!

Keep an eye out for our next blog post where we will look for “Lessons from other industries, leading to new innovative solutions for making smartphone for affordable and accessible”

For more information, visit www.payjoy.com. Join the smartphone financing conversation by visiting the PayJoy blog, Twitter, LinkedIn and Facebook pages.

SOURCE PayJoy

Written by: Dominique Friedl, GM PayJoy Africa

April 3, 2019