Smartphones are a necessity today. With the advent of the pandemic, the use of smartphones accelerated. According to DataReportal, 100 million people began to use smartphones last year.
Gone are the days when smartphones were used for two-way communications and messaging only. These days, we depend on smartphones for our day-to-day activities. For example, purchasing goods and services, making online payments, managing bank accounts, and appointments, buying medicines, groceries, etc.
Our lives are dependent on smartphones. They simplify the way we access information. They are convenient. But, people in many world regions do not have easy access to smartphones, especially in underdeveloped and developing nations.
To own an expensive and feature-rich smartphone is still a dream to many. Device leasing and financing come as a ray of hope to such people who cannot own smartphones by paying hefty amounts upfront.
What is device leasing?
Although leasing expensive devices was always accessible to commercial and business users for many years, leasing smartphones to customers is relatively new. Device leasing is signing a lease agreement for a mobile device or smartphone for monthly payments.
In underdeveloped and developing countries, the market for smartphones has leaped in the past recent years. Thanks to several device leasing firms, financing companies, and resellers. Social media has also played a significant role in boosting the interest level. It has equipped people, especially youth, with information about advanced technology and innovations.
The pros of device leasing
Affordable monthly installments: Through leasing, you can not access the device of your choice in low installments. Also, this way, you gain an advantage over those who pay for expensive cell phones upfront.
Flexible payment process: People can own technology with flexible and easy EMI payments minimizing the financial burden.
Stay updated with the latest technology: Users desire to keep up with the latest technologies in the market. Some users keep upgrading devices to meet their company needs as technology evolves. In these cases, device leasing is an attractive choice.
The cons of device leasing
Payment defaults: Device leasing and financing come with a risk of payment defaulters. Sometimes, the users forget to pay EMI on time. Or it so happens that they don’t have money to pay the installment. It becomes difficult for the financing companies to manage their business.
Device theft and threat to data security: In case of theft, it becomes difficult to recover data back. There are chances of misuse, which poses a significant risk to data security and safety.
Tracking and managing smartphones becomes tough: Once a device is leased, it cannot be tracked and managed from remote locations. Sometimes users swap SIM cards and keep using the leased device without paying the installments. An intact device monitoring and control system is required to address this grave issue.
Credit score fraud: Many countries worldwide do not have an entire credit score system. Leasing or financing devices might represent significant payment fraud risks in such areas.
How to accelerate smartphone ownership in emerging markets?
Several underdeveloped and developing nations need leased smartphones for their advancement and growth. Without easily accessible smartphones, the dream looks afar.
Therefore, it’s critical to simplify the complicated procedure of smartphone leasing and financing. A few smart software solutions in the market are attempting to span all these gaps. They provide facilities such as:
1. Blocking leased devices
Due to device leasing and financing risks, many firms are still skeptical about their future. Specific mobile applications allow businesses to lock their devices down if the user fails to pay for any reason.
2. Tracking devices
Post-leasing a device, it becomes very tough for the companies to track the devices. Underdeveloped nations have higher crime rates. Sometimes to avoid payments, users tend to swap SIM cards. The devices become too tough to track in such cases. The leasing companies and resellers have to bear huge losses.
3. Sending timely payment reminders
Some applications allow device leasing companies to set automated payment reminders. This feature helps those genuine customers who somehow forget to pay on time. It reduces manual effort and costs in payment collection and billing.
A security system to manage and track the leased devices is crucial to speed up the device leasing process. In today’s world, security breaches and incidents are a reality, and the implications are not to be taken lightly.
Another very common option for moving these kinds of pre-existing smartphones onwards as a market is refurbishment. Here, the goal is simply to get a refurbished iPhone out there into people’s hands, which gives people with smaller budgets a better chance of actually being able to own a smartphone they might not otherwise be able to afford. That’s the kind of thing that can really help here.
In emerging markets, security and constant monitoring are of paramount importance. Device leasing and financing combined with secure leasing and payment requisition apps can speed up affordable and sustainable smartphone ownership in emerging markets.