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Square, the card-swiping payment system co-founded by Twitter CEO Jack Dorsey, has agreed to buy Australia’s Afterpay for $29 billion in stock in a deal set to close in 2022’s first quarter, CNBC reported.
Buying Afterpay expands Square’s presence in the growing “installment loan” payment realm popular with younger consumers.
Many Millennials and young adults are foregoing the use of traditional credit cards for purchases of a few hundred dollars, such as a piece of furniture.
Instead, they can arrange with a company such as Afterpay or Affirm to have equal monthly payments automatically withdrawn from their bank accounts.
Afterpay’s 16 million users can pay off a large purchase in four equal payments and are charged a fee if they miss an installment.
Financial services companies from Paypal to Goldman Sachs are scurrying to offer similar “buy now, pay later” services to their customers.
Afterpay will be integrated with Square’s payment service and Cash App, which lets people pay or transfer money without going through a bank.
“Square and Afterpay have a shared purpose,” Dorsey in a statement announcing the purchase.
“We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles.”
Afterpay’s share price shot up 19 percent on the news.
TRENDPOST: As the Bigs buy their way to even Bigger, fewer and fewer corporations control more and more consumer options. Clearly, the more they control, and without the pressure of competition that drives creativity, the less options for consumers.