FinTech: PayPal To Acquire Japanese BNPL Pioneer Paidy For $2.7B

September 9, 2021 | FinTech, News
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PayPal will expand its global portfolio of buy now, pay later (BNPL) solutions.

PayPal (NASDAQ: PYPL) announced earlier this week its acquisition of Paidy, a Japanese payments platform and BNPL provider for ¥300 billion or approximately US$2.7 billion, principally in cash, as big-ticket deals in the BNPL space gather pace. PayPal also said the deal will expand its reach into Japan, the third largest Ecommerce market in the world. (Finovate)

Paidy

Through its Paidy Link tool, the Japanese fintech already integrates with other digital wallets including Paypal, and its users can pay for purchases on Paidy using these wallets. In fact, PayPal was a founding partner for Paidy Link.

The Paidy 3-Pay monthly installment offering allows Japanese shoppers to make purchases online, and then pay for them each month in a consolidated bill at a convenience store or via bank transfer. The company controls credit risk through its proprietary technology that scores creditworthiness, underwrites transactions and guarantees payment to merchants.

“Paidy pioneered buy now, pay later solutions tailored to the Japanese market and quickly grew to become the leading service, developing a sizable two-sided platform of consumers and merchants,” said Peter Kenevan, vice president, head of Japan at PayPal, in a statement. “Combining Paidy’s brand, capabilities and talented team with PayPal’s expertise, resources and global scale will create a strong foundation to accelerate our momentum in this strategically important market.”

The transaction is expected to close in the fourth quarter of 2021. According to Finovate, Paidy marks PayPal’s 23rd acquisition, following Honey in 2019 and Curv and Happy Returns in 2021.

Deal-making in BNPL

Last month, Jack Dorsey-led Square (NYSE: SQ) announced its acquisition of Australian fintech and buy-now-pay-later (BNPL) leader Afterpay (ASX: APT) for $29 billion in an all-stock deal.

Square proposes to integrate Afterpay’s BNPL service into its Seller and Cash App businesses, allowing “even the smallest of merchants to offer BNPL at checkout, give Afterpay consumers the ability to manage their installment payments directly in Cash App, and give Cash App customers the ability to discover merchants and BNPL offers directly within the app.”

Also last month, Affirm (NASDAQ: AFRM) announced it is partnering with Amazon (NASDAQ: AMZN) on a buy-now-pay-later (BNPL) solution to be made available by Affirm to Amazon.com customers. “Offering Affirm’s alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want,” Affirm said in the announcement.

Related Story: Square Plonks Down $29B For Aussie BNPL Giant Afterpay

Image Credit: Paidy

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