PayPal Will Acquire Japanese Buy Now Pay Later (BNPL) Firm for $2.7 Billion

Key Points:

  • 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

Karandeep V

Karandeep V

Karandeep was born in Pune, Maharashtra, an upcoming metropolitan city in the Western region of India. While most members of his family are engineers, he had different ideas. He was more inclined toward exploring the non-technical aspects of a business, which is why he studied Bachelors of Business Administration at Symbiosis International University, Pune.  Having said that, his love for new and upcoming technologies remained intact, which is why he has written extensively about technology throughout his career. After a brief stint with a gaming company at the beginning of his career, he discovered that his love for writing was not temporary.  Being a tech geek, he always liked installing and playing around with new applications on his mobile devices and the home desktop. He was fascinated by how technology can simplify even the most mundane and complex tasks with just a few commands. He keeps a close eye on how businesses use different tools to streamline their operations to boost productivity and efficiency. At ToolsMetric, he writes product reviews that cover the main features and specifications of different enterprise applications. The sheer amount of innovation and hard work that goes into building these tech solutions is one of the reasons why Karandeep loves reviewing these tools. Besides product reviews, he also writes interesting news articles and blogs that track the latest developments in the tech industry.  When he is not writing, you can find him rooted to his seat playing video games, watching movies, or supporting his favorite football team. Since his childhood, he has always loved to travel and explore new places. Traveling is a major part of his life due to a myriad of reasons such as experiencing new cultures, food, and traditions. His other hobbies include playing football, cooking, and running.  You can find him on LinkedIn here.

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