Smart devices, from smartphones to laptops, have become indispensable. The question is, how do people in poorer regions of the world get access, especially given how mobile devices have become a necessity rather than a luxury?
To make smart devices more accessible and affordable to the underserved, device financing has taken off as a concept. Device financing companies make it possible for users to purchase the latest smart devices regardless of their credit histories.
Device financing companies can be OEMs (device manufacturers) or resellers that offer schemes that allow users to purchase the latest devices and pay them back in monthly instalments.
These companies sometimes also provide the hardware pre-installed with a Sim card and offer their own tariff plans to end users. Upon completion of the payment term, the device becomes the user’s property.
This model appeals to underprivileged people and users who do not wish to invest big money upfront buying the latest devices.
But several challenges lie in the way of a well-structured financing plan. Let’s look at some of these:
- Payment default risk: Consumers of financed devices benefit from the schemes offered by financing companies. But what happens if users don’t pay an instalment, or stop paying entirely? This sort of fraud is a huge risk. How do financing companies track down users and extract the required payments? It’s not easy.
- Device theft: Theft of financed devices, without completion of the outstanding payments, is also a massive risk. This requires security solutions that help financing companies secure their devices.
- Management of large device fleets: Apart from delayed payments and device theft, device financing companies must take measures to monitor their devices, track payments and more. When handling a large fleet of financed devices, it becomes imperative to reinforce bulk device management with the appropriate third-party solutions that help keep control.
- Customer loyalty retention with operators: Financing companies that partner with telecommunications operators to offer devices bundled with Sim services also face the problem of users removing pre-installed Sim cards and replacing them with cheaper alternatives.
To counter these challenges, financing companies must enforce device and payment security. But how? They can do this by:
- Enabling digital payments: Empowering users with online modes of payment adds to the convenience of the process as it reduces manual efforts and costs involved in fetching and depositing cash. Digital payments allow users to make payments instantly, regardless of their location, and save time.
- Sending automated payment reminders: Several payment delays occur not only because of fraud but also because the users cannot keep an efficient track of their payment schedules. Financing companies can reduce client payment delays considerably by sending automated payment reminders to clients.
- Offering product knowledge assistance: Financing companies have the option of imparting clear details about how their devices and their finance schemes to educate users about their pricing plans and how digital payments can be processed from the device itself. Proper education at the start of the consumer lifecycle plays a big role in reducing the chances of fraud.
- Blocking defaulters’ devices: Modern security solutions allow financing companies to block the devices of defaulters in the event of delayed payments. Although an extreme measure, this helps them gain control over the situation as it renders the devices unfit for use until the user fulfils his or her outstanding payments.
Financed devices are undoubtedly revolutionising underserved regions. It opens doors to millions of people who lack the financial means to invest large amounts of money in purchasing smartphones.
However, it’s imperative for device financing companies to calculate the risks and challenges involved, and strengthen their finance plans. The latest security solutions, like NuovoPay, offer pragmatic features to financing companies that help them gain control over their devices and reduce risks.
NuovoPay allows device financing companies to send an automated payment reminder to their clients, allows optional integration with leading billing systems for digital payments, and helps keep track of payment and user logs to provide efficient bulk device management.
Not only this, NuovoPay offers remote device blocking, which allows financing companies to block the defaulter’s access to their financed device without deleting the data stored on the device. And Sim-based locking prevents a user from swapping the pre-installed Sim for cheaper alternatives.
NuovoPay is the perfect solution for device financing companies. Schedule a free live demo here and get all your questions answered.
- The author, Harishankar Kannan, is co-founder of ProMobi Technologies
