Azumi Mobile has announced a newly signed agreement to have the PayJoy application installed on its devices in a bid to target consumers in Africa who struggle to secure credit.
The patented Android application is used by retailers, mobile operators or finance companies to lock and unlock a customer's smartphone from a remote location to control the payment of subscriber instalments.
Tayshira Santamaria, General Manager of Africa at Azumi Mobile said the introduction of the PayJoy lock on Azumi smartphones in Q2 2018 is a good fit for the African market where the cost of mobile devices renders them unaffordable to many consumers.
"We are excited to implement the PayJoy Lock within the Azumi Mobile smartphone family as it will enable consumers around the world to experience Azumi technologies for an affordable monthly installment. Azumi delivers an optimised Android smartphone user experience key for emerging regions where costs and quality are especially attractive."
The PayJoy application restricts use of the phone to emergency and support calls, as well as access to critical applications like mobile money when a buyer misses payment.
The role of MNOs
Mark Heynen, Chief Business Officer at PayJoy says the application has already been launched successfully in the in the US and Mexico without the involvement of mobile network operators as partners - although they can become partners in regions like Sub-Saharan Africa.
"Currently (in the US and Mexico) no carrier agreements on locking are required, but PayJoy works in close cooperation with the carriers. The PayJoy Smartphone Lock generally cuts default rates in half. For our business in Mexico we approve 90% of persons that apply for the service, the norm is around 35%. This above average approval rate demonstrates the effectiveness of the service as it allows more people to be approved as payments are improved."
Heynen adds that it is ultimately the finance company that is responsible for the lock because there is a formal agreement in place with the customer.
"The finance company approves the consumer. The loan agreement is between the consumer and finance company. A mobile network operator may opt to be both the smartphone retailer and finance company, or these could be separate."
Azumi has not indicated whether African MNOs have expressed willingness to participate in the rollout of PayJoy on its smartphones.
Heynen says pre-paid customers and the traditionally unbanked, as well as low income consumers unable to afford the high upfront cost associated with handset purchase, will benefit most from the introduction of PayJoy to the African market.
He believes the PayJoy lock will be particularly successful in Africa and cites research by the GSMA on affordable smartphone ownership in emerging markets, conducted in July last year, which established that the highest barrier to mobile phone ownership and use in low and middle income markets is handset cost.
"The average smartphone cost in India and Tanzania equals 16% of income for people on less than $2.00 per day. Making the purchase price more manageable through installment plans is the most meaningful support that can be provided to break the upfront cost of the device into more manageable sums, supporting the consumer through offering affordable loans. Installment plans help people minimise the upfront costs and in doing so, one can anticipate increased market share through increased smartphones sales and higher value smartphones," says Heynen about the outcomes of the GSMA research which informs PayJoy's market outlook.
Doug Ricket, PayJoy's CEO and co-founder say the announcement with Azumi Mobile is another step towards fulfilling his company's mission to make smartphones affordable worldwide through technology that enables people who lack credit to purchase their first smartphone on an installment plan.
Another report by the GSMA from July 2017 titled "Mobile Economy Sub-Saharan Africa" found that smartphone connections in Sub-Saharan Africa have doubled over the past two years to nearly 200 million and now account for a quarter of mobile connections in 2016. The industry body identified an increasing affordability of new devices and a growing market for second-hand devices among factors leading to greater use of smartphones.
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