Jack Dorsey’s crypto currency-friendly digital payments firm Square is expanding competition with global payment giants like PayPal by acquiring a major Australian lending company. Square will obtain Australian fintech firm Afterpay in a $29 billion stock deal.
Square announced that the firm has entered into a scheme implementation deed to acquire all of the issued shares in fintech company Afterpay in a $29 billion deal. The transaction is based on the closing price of the Square common share and is expected to be paid in all stock in the first quarter of 2022.
The acquisition enables Square to further accelerate its strategic plans for payment ecosystems as the company is looking to integrate Afterpay into its Seller and Cash App business units to enable a “buy now, pay later” (BNPL) service.
Also referred to as instalment loans, BNPL transactions allow customers to pay a bill in small portions throughout a fixed period of time and are actively pioneered by global financial firms like PayPal, Mastercard, Klarna, Citi, and others.
According to the announcement, the integration will enable small businesses to offer BNPL at checkout, allowing Afterpay consumers to manage their instalment payments directly in Cash App and discover BNPL offers directly within the app. The integration marks a new milestone for Square in meeting the growing consumer demand for shifting away from traditional credit.
