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

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The company announced the acquisition along with its second-quarter 2021 results.

Jack Dorsey-led Square (NYSE: SQ) announced today (August 2, 2021) its acquisition of Australian fintech and buy-now-pay-later (BNPL) leader Afterpay (ASX: APT) for $29 billion in an all-stock deal. It will acquire all the outstanding shares of Afterpay at this valuation based on the closing price of Square common stock on July 30, 2021. (Square)

Square – Afterpay

Square proposes to integrate Afterpay’s BNPL service into its Seller and Cash App businesses. BNPL has taken off across the world and typically lets a shopper pay for their purchase in a fixed number of installments. More and more shoppers prefer BNPL to a credit card because of fears of exorbitant charges and interest costs. Besides, many shoppers maxed out their cards at the time of the pandemic and BNPL was a lifesaver for them.

“Buy now, pay later has been a powerful growth tool for sellers globally,” said Alyssa Henry, Lead of Square’s Seller business in a statement.

Other firms that offer BNPL include Klarna and PayPal (NASDAQ: PYPL).

Square said the Afterpay integration would “enable 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.”

As of June 30, 2021, Afterpay served more than 16 million consumers and nearly 100,000 merchants globally.

Anthony Eisen and Nick Molnar, Afterpay Co-Founders and Co-CEOs, will become a part of Square once the transaction is completed.

They will help lead Afterpay’s respective merchant and consumer businesses, as part of the payment giant’s Seller and Cash App ecosystems.

Square’s second quarter

For the second quarter, the fintech reported a net income of $204.0 million, or 40 cents a share, compared to a loss of $11.5 million, or 3 cents a share, in the year-prior quarter.

It recorded revenue of $4.68 billion in the second quarter, up from $1.92 billion a year ago, while analysts were expecting $5.03 billion.

Related Story:  Square Mulling A Hardware Wallet For Bitcoin

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