By Sodeinde Temidayo David
PayPal Holdings on Wednesday announced that it has agreed to acquire Paidy, a leading two-sided payments platform and provider of buy now, pay later (BNPL) solutions in Japan, for $2.7 billion.
This is part of the plans of the company to expand its capabilities, distribution and relevance in the domestic payments market in Japan and the Asia market.
In Japan alone, PayPal has over 4.3 million active accounts, where it has been operating since 2010.
The deal strengthens PayPal’s position in the third-largest e-commerce market in the world and also boosts its credentials in the fast-growing Buy now-Pay-Later sector.
Paidy allows Japanese shoppers to make purchases online and then pay for them each month in a consolidated bill at a convenience store or through bank transfer.
The company uses proprietary technology to score creditworthiness, underwrite transactions and guarantee payment to merchants.
Launched in 2014, the firm now claims more than six million registered users and has raised $120 million in a Series D funding round.
According to the vice president, head of Japan at PayPal, Mr Peter Kenevan, the combination of Paidy’s brand, capabilities and talented team with PayPal’s expertise, resources and global scale will create a strong foundation to accelerate the organisation’s momentum in the market.
Following the takeover, the acquisition is slated to close in the fourth quarter, after which Paidy will continue to operate its existing business and maintain its brand.
Commenting on the acquisition, the Chief Executive Officer (CEO) of Paidy, Mr Riku Sugie, noted that the joining of the company with Paypal will accelerate the plan to expand beyond e-commerce and build unique services as the new shopping standard.
In recent months, the two companies had already entered into a partnership that allowed Paidy users in Japan to make purchases on credit from all e-merchants that used PayPal as a payment service around the world.
Adedapo Adesanya