PayPal Steps Up Efforts In 'Buy Now, Pay Later' Segment With $2.7B Deal To Acquire Paidy

PayPal Holdings Inc PYPL said on Tuesday it will buy Japanese payments company Paidy for about $2.7 billion in cash as it looks to boost its presence into “buy now, pay later” products.

What Happened: PayPal said the deal is expected to close in the fourth quarter and will be minimally dilutive to adjusted earnings per share in 2022.

Paidy allows Japanese shoppers to make purchases online and then pay for them each month in a consolidated bill at a convenience store or via bank transfer, PayPal noted.

The acquisition will help PayPal boost its presence in Japan — the third-largest e-commerce market in the world — and step up competition in the strategically important market.

See Also: Is PayPal Getting Into The Stock Trading Game?

"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," said Peter Kenevan, vice president, head of Japan at PayPal.

Why It Matters: The Buy-now-pay-later (BNPL) trend is gaining popularity globally amid the pandemic-fueled e-commerce rush. PayPal began offering the service last year.

The deal comes close on the heels of Jack Dorsey-led Square Inc SQ’s blockbuster acquisition of Australian BNPL firm Afterpay Ltd for $29 billion. 

Apple Inc. AAPL is also reportedly entering the BNPL space in partnership with Goldman Sachs Group Inc GS.

Price Action: PayPal shares closed 1.43% higher at $293.26 on Tuesday.

Photo: Courtesy of PayPal