PayPal to buy Japanese buy now, pay later firm Paidy for $2.7 billion

U.S. payments giant PayPal Holdings Inc said it would acquire Japanese buy now, pay later (BNPL) company Paidy in a $2.7 billion deal.

The acquisition is considered a move by the payments firm to step in the BNPL industry booming in the pandemic.

Online shopping has tripled in Japan over the last 10 years to around $200 billion and buying Paidy will aid PayPal’s expansion in the country, said the U.S. firm.

In Japan, though, people have traditionally favoured cash as more than two-thirds of the purchases are paid in cash.

PayPal’s rival Square Inc also bought Australian BNPL company Afterpay Ltd for $29 billion to strengthen its position in the sector.

Shares of PayPal rose 1% in heavy volumes in premarket trading whereas shares of Square were slightly lower.

Paidy, which has more than 6 million registered users, is backed by Soros Capital Management, Visa Inc and Japanese trading house Itochu Corp.

After the acquisition, the Japanese firm will continue to operate its existing business and maintain its brand. Founder and Chairman Russell Cummer and Chief Executive Riku Sugie will also continue to hold their roles.

The deal is expected to close in the fourth quarter.

(With inputs from Reuters)

Picture Credits: Reuters