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.
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
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!
PayJoy: Finance for the Next Billion 