- U.S.-based payments company PayPal has announced that it will acquire Japan’s BNPL darling Paidy
- PayPal will acquire Paidy for around $2.7 billion which will be paid in cash
- The announcement comes in the wake of growing competition within the BNPL market in recent months
PayPal, the American payments company has announced that it is all set to acquire Japanese BNPL firm Paidy in a $2.7 billion cash deal. This move allows PayPal to strengthen its foothold in Japan by adding new services to its main cross-border e-commerce platform.
The entry of a popular foreign company will play an important role in intensifying competition in Japan’s payments sector.
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More about the Cash Deal
PayPal is set to make the acquisition of Paidy in a cash deal. As per the latest updates, the transaction is expected to complete in the last quarter of 2021.
After the acquisition, Paidy’s CEO and President, Riku Suige, and Executive Chairman, Russel Cummer will be part of the company and take care of its management.
Until now, PayPal primarily focussed on cross-border e-commerce transactions for overseas products in Japan. PayPal’ CEO Dan Schulman says that Japan is the third-largest e-commerce market in the world and has a lot of opportunities.
Even today, cash is used to complete around 70% of payments in Japan. This indicates that there is plenty of room for growth. This acquisition will enable PayPal to improve its presence in Japan.
PayPal’s Current Position in the BNPL Market
PayPal has managed to establish itself as a key player in the online payments space. The number of operating accounts was more than 400 million by the end of June 2021, out of which 40% are outside the U.S.
The value of all transactions for April-June this year has increased 40% Y-o-Y to $310.9 billion. Besides, PayPal’s market capitalization is almost equivalent to major U.S. banks.
More about Paidy
Paidy offers a BNPL service that does not require a credit card. Besides, it is also one of the last few unlisted firms in Japan with a capitalization of more than $1 billion.
What is BNPL?
Buy now pay later is a payment service that allows users to pay installments without any fees for a limited time. BNPL has gained immense popularity among the new generation of consumers particularly in Europe and North America.
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Feature Image Source: PayPal