PayPal (NASDAQ: PYPL) has announced the acquisition of buy now, pay later (BNPL) firm Paidy for $2.7 billion (¥300 billion) – mainly in cash. BNPL services have boomed in popularity as the services has emerged as an alternative to expensive credit card transactions.
Paidy offers instant, monthly-consolidated credit to consumers using proprietary models and machine learning to underwrite transactions in seconds and guarantee payments to merchants. Japanese consumers may purchase online and then pay in a consolidated bill each month. The strategic purchase will boost PayPal’s presence in Japan which is the third largest e-commerce market in the world.
Peter Kenevan, Vice President and head of Japan at PayPal, stated:
“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. 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.”
Russell Cummer, founder and Executive Chairman of Paidy, stated:
“There is no better home for Paidy to continue to grow and innovate than PayPal, which has been removing friction from online shopping for more than 20 years. Japan has been a vibrant environment for our growth to date and we’re honored to have our team’s hard work and potential recognized by a global leader. Together with PayPal, we will be able to further achieve our mission of taking the hassle out of shopping.”
Paidy reports over 6 million registered users, working with both global brands and online marketplaces. Its integrations with PayPal and other digital and QR wallets through Paidy Link is said to expand Paidy’s reach to online and offline merchants beyond its platform.
“Paidy is just at the beginning of our journey and joining PayPal will accelerate our plans to expand beyond ecommerce and build unique services as the new shopping standard,” said Riku Sugie, president and CEO of Paidy. “PayPal was a founding partner for Paidy Link and we look forward to working together to create even more value. Thank you to our community of merchants and users who helped us get to this important milestone.”
According to a release, Paidy will continue to operate its existing business, maintain its brand and support a wide variety of consumer wallets and marketplaces. Both Cummer and Sugie will continue to lead the Paidy team.
Contingent on typical regulatory approvals, the acquisition is expected to close in Q4 of 2021.