The American giant announced on Tuesday night the deal mainly in cash, worth 300 billion Japanese yen (about $ 2.7 billion).
In a statement, PayPal (PYPL) he said the acquisition was to expand its “capabilities, distribution and relevance in the domestic payments market in Japan, the world’s third largest e-commerce market.”
The move comes just weeks after another big fintech technology company, Square (SQ), said it will allocate more than $ 29 billion to Afterpay, the Australian company that also allows customers to pay for their purchases in installments. The acquisition is Square’s largest.
Last month, Amazon (AMZN) he also announced that he would team up with fake technology service provider Affirm, to launch his purchase now and pay for the later feature for some purchases over $ 50.
The two companies said that while the service was still being tested, “Amazon plans for Affirm to be more widely available to its customers” over the next few months. Affirm is run by CEO and founder Max Levchin, who is also a co-founder of PayPal.
Buy now, pay later for offers that have increased in popularity as a way to reach younger consumers and keep up with the rapid shift towards pandemic online shopping. Payment analysts have noted that the trend is especially popular among Millennials and Generation Z, who are wary of taking out credit card debt.
PayPal recently increased its offerings in the space and announced a tool last summer that would still allow retailers to pay in advance, even if customers choose to pay for fractional purchases for several weeks.
Paidy was founded in 2008 in Tokyo and later gained the support of marquee investors, including Visa (V) i Goldman Sachs (GS).
Since then, the company has become a market leader in Japan, reaching more than 6 million users and allowing “Japanese shoppers to shop online and then pay them each month on a consolidated invoice in a store. of convenience or by bank transfer “, according to PayPal.
Russell Cummer, founder and CEO of Paidy, said Japan had proven to be “a vibrant environment” for the company’s growth, as consumers were receptive to new ways of making payments.
PayPal is already partnering with Paidy on an existing service, which allows users to connect other digital payment systems to their Paidy accounts.
PayPal said Tuesday that Paidy would continue to maintain its brand in Japan and that its current management team would continue to lead the new entity.
“Paidy is just at the beginning of our journey and joining PayPal will accelerate our plans to expand beyond e-commerce and build unique services like the new purchasing standard,” said Riku Sugie, president and CEO of PayPal. startup.
The $ 2.7 billion price doubled Paidy’s last known valuation, which was $ 1.2 trillion as of this March, according to CB Insights. This makes it one of Japan’s best unicorns or private startups worth more than $ 1 billion.
The deal is expected to close in the fourth quarter of this year.
– Rob McLean and Paul R. Monica contributed to this report.
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