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Paidy's Innovative Cardless Payment Solution Using Vonage APIs
Technology Category
- Networks & Connectivity - NFC
- Robots - Wheeled Robots
Applicable Industries
- Electronics
- Retail
Applicable Functions
- Procurement
- Sales & Marketing
Use Cases
- Machine to Machine Payments
- Retail Store Automation
Services
- System Integration
The Challenge
Japan has a unique retail landscape where approximately 80% of retail sales are made via cash purchases. This is largely due to cultural reasons, as cash holds great traditional and sentimental value in Japanese society. However, this posed a significant challenge for consumers who wanted to make online purchases but were uncomfortable using credit cards. The challenge was to find a solution that would enable these consumers to make online purchases without the need for a credit card, while also maintaining the security and efficiency of transactions.
About The Customer
Paidy is a Tokyo-based finance company that has been leading the way in cardless payments. Since its launch several years ago, Paidy has grown rapidly and currently has 2.5 million user accounts. The company has established a large network of over 700,000 merchants in Japan who use the system for online purchases. Paidy's business model is described as a B-2-B-2-C model, where they sign up merchants, and then acquire consumers through those merchants. The company's innovative payment system has been designed to cater to the unique retail landscape in Japan, where a majority of consumers prefer to make cash purchases.
The Solution
Paidy, a Tokyo-based company, introduced a cardless payment system that requires only a customer’s email address and phone number to make a transaction. This system was enabled by the Vonage SMS API with 2FA and Voice API with TTS. Customers can purchase goods and services from Paidy-enabled merchants by simply providing their mobile phone numbers and email addresses. Paidy then verifies the customers' identities with a four-digit code sent through SMS or voice technology. Customers settle their bills once a month at a convenience store, or through bank transfers or auto-debits. Paidy's system also aggregates multiple transactions into one balance, making it more cost-efficient than the popular 'Cash on Delivery' method in Japan.
Operational Impact
Quantitative Benefit
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