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Online payments pioneer Paypal will buy Paidy, a Japanese buy-now-pay-later (BNPL) app, in a mostly-cash, $2.7-billion deal, the Financial Times reported.
Paidy launched its delayed-payments app only last year.
It allows its six million users to spread payments over three equal monthly installments with no interest. The idea is a novelty in a country that still relies largely on cash for purchases of all but the most expensive items.
“Combining Paidy’s brand, capabilities, and talented team with Paypal’s expertise, resources, and global scale will accelerate our momentum in this strategically important market,” Paypal vice-president Peter Kenevan said in a statement announcing the purchase.
Paypal’s big gulp is the latest acquisition in the rapidly expanding BNPL business, in which consumers can spread payments for expensive items over a few months, typically with no interest charge and often without a credit check.
Last month, Twitter-owned Square put up $29 billion to take over Australian BNPL company Afterpay in the biggest M&A in the country’s history, the FT noted.
San Francisco-based Affirm has partnered with Amazon to let customers spread out payments for items costing more than $50. Affirm’s share price soared on the news.