Japan-based Fintech firm Paidy, specializing in the Buy Now, Pay Later or BNPL sector, is reportedly looking into going public. This, according to a report from the FT.
BNPL has become quite popular globally, with many new Fintechs entering the space within a relatively short period of time. This flexible payments or pay over time sector has seen the rise of giants such as Klarna from Sweden, Silicon Valley’s Affirm and even PayPal introducing its pay later options.
Paidy claims around 6 million users, many of whom are women aged 18-34. While BNPL has become a widely used payment method in Japan, it’s adoption rate is still comparatively slower than the international level. Globally, there’s been a dramatic increase in BNPL due largely to the COVID-19 outbreak, which has led to permanent changes in consumer behavior. These trends include many more people engaging with digital commerce platforms and conducting virtual payments.
Paidy’s products enable consumers to gain access to post-payment methods, allowing shoppers to make more manageable payments for a month’s worth of purchases (the following month). The firm introduced a new service enabling clients to split the cost of a particular payment into three smaller installments without paying any interest. According to the FT, this may have been the first time that this type of payment option was offered to Japanese consumers.
Paidy’s management stated the firm is a Unicorn that’s supported by established companies such as trading platform Itochu, Wall Street investment bank Goldman Sachs, and PayPal.
As noted by the FT, market participants and investors believe Paidy is probably going to submit an IPO application in Tokyo in 2021. The firm clarified that there’s no definite date for a potential listing this year.
Russell Cummer, Founder at Paidy, remarked:
“We have access to capital. In our business, it’s also important to have access to credit lines, which we do, but at the same time, every company does mature and get to the point where it also makes sense to be a public company.”
Notably, the BNPL sector is getting extremely crowded and competitive, with e-commerce giant Amazon entering the space through a partnership with Affirm, which may allow Amazon to offer an even wider range of payment options.