How finance companies can reduce EMI default risk on smartphone finance – IT news Africa


Image from the Digital Frontiers Institute.

In a dynamic world driven by innovation and automation, each sector, whether industrial or not, relies heavily on the latest technologies. Smartphones are one of the popular mobile devices that everyone wants to own. The relentless demand to buy smartphones and other mobile devices has given rise to proposals such as device financing.

Device financing allows users to spread their payment for the purchase of smartphones and other devices into smaller chunks that can be paid over a fixed term. This allows users to buy the latest devices despite their high costs without burning their pockets.

Who are the device funders?

Original equipment manufacturers (OEMs) or device resellers are typically the ones who act as funders and develop device financing programs for users. Such device finance companies allow users to split their wholesale payments into installments to be made over a set period of time. How device funders are different from device lessors is that after full payment is made, users can keep their funded devices permanently.

Why has device financing become popular?

Consider people in underserved areas who cannot afford expensive devices, or millennials and Gen Z who want to own the latest smartphones, funded devices that meet these requirements are a cost-effective method of purchasing. latest devices. Needless to say, funded devices gained popularity in no time. Funded devices not only pave the way for people, despite their economic status, to own devices like smartphones, but also;

  • Distributes the financial burden
  • Provides access to the latest technologies
  • Does not require full documentation

Challenges faced by businesses in lending funded devices to users

Rising prices for smartphones and other cutting edge devices have resulted in a massive shift in the population towards purchasing funded devices. The boom in adoption of funded devices poses some challenges for finance companies such as;

  • Management of a large pool of funded devices: Device financing is more than just lending devices to users. This involves managing the fleet of devices, tracking payments, and more, which can be a tedious and time-consuming task for finance companies.
  • Late payments and EMI fraud: In the event of a user’s inability to pay installments on a timely basis, collecting overdue payments is a hectic chore that every finance company struggles with.
  • Risk of theft of the device: Incidents of loss or theft of funded devices can result in significant losses for device funders due to the difficulty of locating and recovering lost or stolen devices.

How can device finance companies tackle the risk of EMI fraud?

While funded devices have proven to be extremely beneficial for their consumers, the risks and challenges they present for device funders are numerous. Device finance companies, OEMs and resellers, have started to trust payment security solutions that help them secure their funded devices.

NuovoPay is one such security solution that helps device finance companies lend their devices with confidence and effortlessly manage the tedious payment logs of their funded device fleets. Let’s take a look at some of the benefits that NuovoPay offers to protect funded devices.

  1. Remote mobile locking technology
    One of the most apparent concerns that device funders face is the risk of their funded devices being stolen. NuovoPay offers a remote device locking feature that allows funders to block user access to their devices in the event of theft or default.
  2. Automated payment reminders
    Device finance companies can timely define automated payment reminders which can be set for bulk devices which alerts users of their next installment. This negates the chances that users and funders lose track of their recurring payments and results in a higher ratio of one-time payments from users.
  3. SIM based lock
    Several device manufacturers or resellers who finance devices partner with telecommunications service providers to offer devices preinstalled with SIM service. Payment and service systems for these bundled devices include telecommunications pricing plans in addition to periodic device payments.

However, it also comes with the risk that users will replace the preinstalled SIM card with a cheaper alternative. NuovoPay offers security not only towards the financed device but also for the telecommunications operators with its SIM card based lock functionality.

If users attempt to remove the pre-integrated SIM card from the device, the device blocks the user’s access to it, rendering the device unsuitable for further use.

4. Option to integrate invoicing system providers

NuovoPay enables device finance companies to integrate leading billing system software into its dashboard to simplify complex tasks and help finance companies de-clutter their payment records. With this, monitoring payment status, tracking receipts and inventory details of a large fleet of devices can be done effortlessly.

Closure lines

Nuovopay acts as a collection agent to help device funders secure their funded devices using a centralized dashboard that gives them an overview of multiple funding plans, payment statuses and protect their devices from theft and fraud. In this way, vendors can move from manual and time-consuming methods of tracking inventory records and payment follow-ups to an automated platform to efficiently organize their device funding model.

Schedule a free live demo here and get all your questions answered.

By the editor.


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