PayPal to Acquire Japanese BNPL for $2.7 Billion

PayPal Holdings Inc (NASDAQ:PYPL) has announced it will be acquiring the Japanese Buy Now Pay Later (BNPL) company for $2.7 billion. This move comes as a tactic to dominate the growing market which experienced a great boom during the pandemic.
The deal comes after Square Inc (NYSE:SQ) agreed to buy Afterpay, an Australian BNPL corporation for $29 billion. This deal paved way for similar acquisitions in the technology industry. According to a statement released by PayPal, “the acquisition will expand PayPal’s capabilities, distribution and relevance in the domestic payments market in Japan, the third largest ecommerce market in the world, complementing the company’s existing cross-border ecommerce business in the country.”
Paidy offers a range of payment services to users for online purchases which can be paid off every month through bank transfer or at a local convenience store. The company has over 6 million registered users and is growing steadily.
Japanese consumers are moving towards online payments and are letting go of cash transactions. One key difference between Japanese and US users is that Japanese prefer to pay off all outstanding debt at the end of every month. The buy now pay later business model has gained much popularity due to the pandemic. Consumers can pay back with interest free payments, making them a better options as compared to interest-ridden credit cards. The deal is expected to be complete by the end of the year.