Fintech startup Paidy raises $55 million to let customers shop online without a credit card

Paidy, a Japanese fintech startup that enables consumers to shop online without using a credit card, has raised a $55 million Series C. The company made the announcement today. The round was led by Japanese trade conglomerate Itochu Corporation, with participation from Goldman Sachs. The latest round brings its total funding $80 million. The company raised a $15 million Series B announced two years ago. The company offers customers post-pay credit account linked to their mobile phone numbers.

Founded in 2008 by Russell Cummer, Paidy is a new way for consumers to pay at online stores using only their name and email address. Optimized for mobile and instant-checkout, Paidy allows consumers buy online quickly and safely and does not require a credit card or pre-registration.

Paidy started Japan’s first instant post-pay credit service for eCommerce consumers in October 2014. Paidy requires no pre-registration or credit card to use; Paidy consumers purchase products online using only a mobile phone number and email address (verification is established though a four-digit code via SMS or voice pin-code) and settle a single monthly bill for all their purchases, either at a convenience store, by bank transfer or auto debit. Paidy also supports multi-pay installments and subscriptions. There are currently over 1,400,000 Paidy accounts in use (June 2018).

Paidy has proved a powerful means of persuading first time buyers to transact online. Its proprietary models and machine learning mean that transactions are underwritten in seconds, with guaranteed payment to merchants. Paidy increases merchant revenues by reducing incomplete transactions, increasing conversion rates, boosting average order values, and facilitating easy repeat buying.

Going forward, through the launches of large merchants, expansion into the offline market, and offering of additional financial services, Paidy expects to grow its customer base to 11,000,000 accounts by 2020.

“We are extremely honored that Paidy’s business concept was highly valued by one of Japan’s most prestigious business conglomerates, ITOCHU. Through this tie-up, we expect to launch new merchants in order to deliver Paidy’s frictionless and intuitive financial
solution to a much broader audience. Furthermore, by adding new payment functions and diverse financial services, thereby making our customer attachments much more robust, we aim to promote our vision of removing barriers and creating unique consumer experiences to as many people as possible,” said Russell Cummer, founder and executive chairman of Paidy.

Paidy was founded with the mission to create a world of “We remove the barriers, embrace simplicity”, offering its real-time monthly consolidated credit service all across Japan.