Challenges

First of all, MSMEs always have challenges to introduce card payments. It is because MSMEs are considered too risky for credit card issuers under traditional credit screening process. Not only consumers but also MSMEs need to introduce card payments to purchase products and services online. On the other hand, by development of BaaS infrastructure, it becomes possible for card issuers to read bank accounts digitally that clarify the risky or non-risky companies in a new way. That new credit process enables honest users to have more credit limit and have card payment instruments.
Secondly, traditional cards cannot be controlled by companies online. MSMEs have concern about potential employees’ fraudulent payment if they hand on cards to employees. Cloud-based card services such as paild address that kind of concern through real-time control.

Primary target

Which group does your product/service primarily target?

Description of Innovation

The core innovations of paild are (i) digital-based credit screening process and digital wallet and (ii) cloud-based card controlling software. The details are following.
paild is a cloud-based corporate card service that enables MSMEs to introduce card payment easily and streamline back-office operation. paild provides users sufficient credit limit by reading bank account balance in real-time and prepaid wallet to achieve users’ high-value card payment beyond their credit limit. In addition, users can issue and control cards online whenever and wherever they want. They distribute cards to employees and departments to make their spends transparent. paild is a cloud-based corporate card service

Results

Since its launch in Aug 2020, we have acquired over 1,000 MSME users and over 10,000 employee users which grow rapidly in number. Considering the fact that there are 4 million MSMEs in Japan, this business impacts over 10 million employees to introduce card payment in business and reduce cumbersome expense report tasks in the future.

Lessons Learnt

API based BaaS such as banking, card payment is the key of success. These infrastructure makes it possible for fintech startups to make their new products.
In addition, skillful engineers are also necessary because developing new products is not easy especially in fintech space.

Deregulation around payment industry to enable startups enter into the market is a key of success. We have prepaid payment instruments license in Japan to make digital wallet. In the past, such payment or settlement are allowed to only banks. Regulation is still important for users’ protection but deregulation to encourage new businesses is also a key. The good regulation is to balance between risk and gain from society perspective.