How will the Smart-PayJoy partnership help more Filipino consumers access credit and smartphones?

In a strategic move to bridge the digital divide in the Philippines, wireless telecommunications provider Smart Communications, Inc., a subsidiary of PLDT Inc., has entered a transformative partnership with San Francisco-based fintech innovator PayJoy. Announced on June 29, 2025, the collaboration seeks to empower Filipino consumers—especially those with limited or no access to traditional credit—by offering flexible smartphone financing plans that support national digital inclusion objectives.

Smart Communications, Inc. is one of the Philippines’ most prominent mobile service providers, offering extensive 4G/LTE and 5G coverage to over 97% of the population. PayJoy, a Public Benefit Corporation, is recognized globally for its pioneering role in delivering responsible mobile financing solutions to underserved markets using AI-driven underwriting and phone-locking security features. Together, these two organizations aim to unlock smartphone ownership for millions of low-income Filipinos through accessible credit pathways, thereby enabling increased digital participation across work, education, and social life.

This joint initiative addresses a critical market need. The number of smartphone users in the Philippines is projected to surpass 80 million by 2029, a reflection of rising mobile penetration driven by demand for digital connectivity. However, access to mid- and high-end smartphones remains out of reach for many due to financial constraints and lack of formal credit records. By offering a frictionless installment model that only requires an ID and mobile number, Smart and PayJoy are positioning themselves at the forefront of equitable tech access.

Why is smartphone financing important for bridging the digital divide in emerging markets like the Philippines?

Historically, smartphone adoption in the Philippines has been skewed toward mid- and low-end devices due to affordability concerns. The local economy has a large informal sector, and credit card penetration remains among the lowest in Southeast Asia. This has left millions of potential users excluded from digital services that require more capable mobile devices. Analysts believe bridging this digital access gap is essential not only for social inclusion but also for economic development, especially as the country accelerates its transition toward a digital economy.

Smartphone financing models have gained significant traction in comparable markets like India, Indonesia, and parts of Africa. These models enable low-income consumers to own devices through installment payments without collateral or complex paperwork. With PayJoy’s proprietary phone-locking technology, which limits device use if payments lapse, the model minimizes lending risk while incentivizing repayment.

Institutional observers suggest that similar credit models could catalyze greater access to financial services, e-commerce, e-learning platforms, and gig economy participation. In the case of the Philippines, where 3G networks are being phased out in favor of 4G and 5G, device financing is a timely enabler for network migration, ultimately improving user experience and data consumption.

What are the terms of PayJoy’s smartphone installment plan in partnership with Smart Communications?

According to the announcement, eligible consumers can now acquire smartphones without the need for credit cards or proof of income. Applicants only need to submit a government-issued ID and their mobile number to qualify for PayJoy’s financing, which breaks down payments over a flexible duration of four, six, or nine months. Notably, customers who choose the nine-month option receive one month of amortization free, applied as a rebate on the final installment—an incentive running between April 9, 2025, and February 24, 2026.

The program covers select mid- and high-end smartphones bundled with Smart or TNT Prepaid SIMs. The emphasis is on delivering value to users seeking to transition from outdated 3G models to more powerful 4G or 5G-capable devices. By enabling ownership without upfront cost barriers, the initiative encourages the use of richer digital experiences such as video streaming, real-time collaboration apps, and mobile gaming—activities increasingly central to modern life in the Philippines.

Executives at Smart Communications have emphasized that this financing model aligns with their broader mission to offer inclusive connectivity. They believe the model empowers Filipinos not just to own modern smartphones but also to fully utilize the capabilities of Smart’s advanced LTE and 5G networks.

How does PayJoy’s proprietary technology improve credit access for underserved populations?

At the heart of PayJoy’s inclusive financing model is its use of AI and hardware-based device locking software. This proprietary system enables PayJoy to offer risk-adjusted loans to consumers who are otherwise excluded from formal banking systems. If a customer misses a payment, the system automatically locks the phone’s non-essential functions, allowing only emergency calls and repayments. This ensures high repayment compliance while avoiding harsh punitive measures.

The system also generates user behavior data that can help build a financial identity, enabling previously “unbanked” customers to graduate to other credit products over time. This is crucial in economies like the Philippines where millions operate outside the formal credit ecosystem.

With over 66 million customers already served in the Philippines, PayJoy’s track record indicates growing trust in alternative credit-scoring models. Analysts highlight that this trust stems from the company’s transparent pricing, simple onboarding, and strong data privacy standards. In essence, PayJoy is transforming a smartphone into a gateway to the digital and financial world, especially for first-time credit users.

What role does the Smart-PayJoy alliance play in supporting the Philippines’ national digital strategy?

The partnership directly supports the strategic priorities of the Philippine government to strengthen digital infrastructure and enhance financial inclusion. The national broadband plan and the National ID system aim to connect underserved populations to digital services, yet access to appropriate hardware remains a hurdle.

By easing smartphone acquisition, Smart and PayJoy’s initiative aligns with Sustainable Development Goal 9, which focuses on industry, innovation, and infrastructure. Parent company PLDT has made explicit its commitment to the United Nations Sustainable Development Goals (UNSDGs), and this partnership operationalizes that commitment at the grassroots level.

Institutional investors tracking PLDT Inc. see such collaborations as favorable for long-term growth. They note that improved customer lifetime value, increased data usage, and higher customer stickiness could result from enhanced device accessibility. For PayJoy, the move further consolidates its footprint in Asia, signaling scalability for similar models across other frontier markets.

What are analysts and institutional stakeholders expecting from this initiative in the long term?

Analysts following Southeast Asia’s telecom and fintech sectors have flagged this initiative as a high-impact move that leverages synergies between connectivity and consumer credit. They expect smartphone upgrades to drive increased ARPU (average revenue per user) for Smart, while PayJoy stands to deepen its credit penetration in a high-growth market.

Institutional sentiment remains positive given the convergence of multiple tailwinds: growing smartphone demand, rising mobile-first behavior, expanding fintech adoption, and government-backed infrastructure rollouts. Moreover, the hardware-security-driven credit model offers strong risk mitigation, which is likely to reassure investors about PayJoy’s portfolio quality.

Looking forward, observers expect Smart and PayJoy to expand the partnership with more device SKUs, longer-term financing options, and possibly bundled content services such as entertainment subscriptions or e-learning platforms. Analysts also foresee the potential for PayJoy to serve as a credit onboarding platform for broader fintech products in the PLDT ecosystem.