PayJoy's Indonesian Gambit: Locking Phones to Unlock Credit Access

JAKARTA, Indonesia – November 26, 2025 – Emerging-markets credit provider PayJoy officially entered the Indonesian market today, announcing a strategic partnership with PT Bank Sahabat Sampoerna. The move marks a significant expansion for the profitable fintech firm, which aims to replicate its global success by offering smartphone financing to millions of Indonesians who lack access to traditional credit. However, the company's unique and controversial technology—which uses the phone itself as collateral by remotely locking it for missed payments—sets the stage for a high-stakes test of innovation versus consumer protection in one of Southeast Asia's most dynamic markets.

A Digital Key for an Analog Gap

Indonesia presents a classic emerging-market paradox: a hyper-connected society with a vast, underserved financial landscape. With over 212 million internet users and a mobile connection rate exceeding 125% of the population, digital life is ubiquitous. Yet, a staggering 92 million adults remain unbanked, and another 47 million are underbanked, cut off from the formal credit systems that fuel economic mobility.

This digital-savvy but credit-starved population is the precise target for PayJoy. The Indonesian government, through its Financial Services Authority (OJK), has set an ambitious goal of achieving 98% financial inclusion by 2045. Fintech lenders have flooded the market to help close this gap, with over 100 licensed platforms competing for customers. PayJoy's entry, however, is not just another play in a crowded field; its model is designed to reach the customers others cannot. By requiring only a national ID and a phone number, the company boasts approval rates exceeding 90%, opening a door that has long been closed to those with thin or non-existent credit files.

"There's a significant gap in credit access across Southeast Asia, and PayJoy is committed to helping close it responsibly," stated Rene Payan, the executive leading the company's new-market launches, in the official announcement. This commitment to responsibility will be closely scrutinized as the company deploys its distinctive technology.

The 'PayJoy Lock': Collateral in the Palm of Your Hand

At the heart of PayJoy's business model is its proprietary "PayJoy Lock" technology. When a customer finances a smartphone, the company's software is installed at the firmware level, a deep integration achieved through partnerships with major manufacturers like Oppo, Honor, and Realme. This isn't just a surface-level app; it's a kill switch that is difficult to bypass.

If a customer misses a payment, the company can remotely lock the device, rendering it largely unusable. However, PayJoy frames this not as a penalty, but as a unique feature of its "responsible" lending approach. Unlike traditional lenders, the company claims it does not charge late fees, raise interest rates, or engage in aggressive collection tactics. When a phone is locked, the payment schedule is paused, theoretically preventing debt from spiraling. The lock serves as a powerful incentive for the user to contact PayJoy and resolve the payment issue, which the company suggests is often related to temporary cash-flow problems rather than a refusal to pay.

This model effectively turns the smartphone—an increasingly essential tool for work, education, and communication—into its own collateral. By securing the loan with the asset itself, PayJoy dramatically reduces its risk, enabling it to extend credit to a demographic that would otherwise be deemed too risky. This technological advantage is the engine behind its rapid growth and profitability.

A Proven Blueprint for Profitable Growth

Indonesia is the latest stop on PayJoy's aggressive global expansion tour. Founded in 2015, the company has already served over 17 million customers across nine markets, including Mexico, Brazil, and South Africa. Its financial trajectory is a rarity in the often cash-burning fintech sector. PayJoy is reportedly growing at a 40% annualized rate and projects to hit approximately US$650 million in revenue and US$110 million in profit by the end of 2025, up from nearly $450 million in revenue in 2024.

This success has attracted significant investor confidence, with the company having raised over $400 million in debt and equity, including a $360 million Series C round in April 2024. The strategy is clear: enter a market with the core smartphone financing product to acquire customers, then expand the relationship. In more mature markets like Mexico and Colombia, PayJoy has already rolled out revolving credit lines and the "PayJoy Card," which are becoming key drivers of profitability. The company is also piloting a digital wallet with plans to enter remittances and insurance, signaling its ambition to build a comprehensive financial ecosystem for the underbanked.

The Indonesian launch, in partnership with the established Bank Sampoerna, follows this proven blueprint. By leveraging a local bank's infrastructure and credibility, PayJoy can navigate the market more effectively while focusing on its core technological and underwriting strengths.

Navigating Indonesia's Regulatory Gauntlet

While PayJoy's model is potent, its entry into Indonesia will not be without challenges. The country's fintech landscape is governed by a complex and evolving regulatory framework overseen by the OJK. Foreign-owned P2P lenders, for instance, are subject to an 85% ownership cap, requiring a partnership structure like the one PayJoy has established.

The most significant scrutiny will undoubtedly fall on the "PayJoy Lock." While the company presents it as a consumer-friendly alternative to late fees and aggressive collectors, regulators and consumer advocates may see it differently. The act of disabling an essential life tool, even temporarily, could be viewed as a coercive practice. The OJK, which runs a regulatory sandbox to test new financial innovations, will be tasked with balancing the clear benefit of expanded credit access against the potential for this technology to cause distress or disempower consumers.

Furthermore, Indonesia's new Personal Data Protection (PDP) Law, enacted in 2022, places strict obligations on how companies collect, use, and secure user data. As PayJoy's model relies heavily on data science and AI for its underwriting, its compliance with these new privacy standards will be critical. The competitive environment is also fierce, and rising non-performing loans across the sector could pressure margins, testing the resilience of PayJoy's unique risk-mitigation strategy. The company's success will depend not only on its technology but also on its ability to navigate this intricate regulatory and consumer protection maze with transparency.