PayPal has announced it will acquire Japanese ‘buy now, pay later’ company Paidy for around $2.7 billion in a cash deal set to complete later in the year.
The move is designed to help the payments giant get a stronger foothold in the Japanese e-commerce marketplace, while also allowing it to boost its range of cross-border payment options.
Along with boosting the fortunes of PayPal, the announcement looks set to help intensify competition within Japan’s financial payments sector. PayPal is continuing to bulk out its online payments business, having registered over 400 million operating accounts as of June this year. The company says that around 40% of those are located outside the US.
- We've also featured the best website builder offerings
- Take a look at the best content marketing tools around today
- Check out the best online marketing services as well
As demand for e-commerce products and services grows so does the need for businesses to accept payments in more flexible ways. PayPal’s suite of product options have allowed it to built up around 32 million member stores that can now accept payments via the PayPal infrastructure. That has resulted in PayPal recording a total transaction volume of $310.9 billion between April and June of this year, up 40% year on year.
Buy now, pay later
Japan is an expanding market for PayPal too, and its expansion in Asia will allow it to build on the 4.3 million active accounts it already has in the country, which is currently the world’s third-largest e-commerce market. However, in a country frequently praised for its technological innovations, cash continues to be used for 70% of payments.
By acquiring Paidy, which boasts some 6 million members, PayPal could boost its market share considerably. Paidy currently offers a buy now, pay later service that doesn't need a credit card. Having raised 13 billion yen from a George Soros investment fund and remaining so far unlisted, Paidy has a market capitalization in excess of $1 billion.
Buy now, pay later services are clearly in demand, with the likes of US payment giant Square snapping up Australia’s Afterpay for around $29 billion. Similarly, Sweden’s Klarna buy now, pay later operation has raised a sizeable $639 in funding in order to allow it to continue its expansion, highlighting the universal nature of flexible payment plans that appeal to consumers worldwide.
- Also, check out our roundup of the best ecommerce hosting services
