Mobile payments company Square will acquire Australian buy now, pay later service provider AfterPay for up to $29 billion , with the deal scheduled to close in the first quarter of 2022.
Once the acquisition is completed, Afterpay shareholders will own about 18.5% of Square, the companies said . The deal has been approved by the boards of both companies but still needs the support of Afterpay shareholders. Square said the deal will help grow Cash App's total user base by adding Afterpay's 16 million users to Cash App's existing user base of 70 million.
Founded in 2015, Afterpay serves more than 16 million consumers and nearly 100,000 merchants worldwide , according to Afterpay co-founder Nick Molnar. Afterpay allows retailers to offer customers the option of paying in installments, with no interest if the customer pays on time. Merchants pay Afterpay a fixed fee, plus a cut of the order .
Afterpay said its service is used by merchants in Australia, the United States, Canada and New Zealand, as well as the United Kingdom, France, Italy and Spain. This includes major retailers in key verticals such as fashion, homewares, beauty and sporting goods.
During the epidemic, more and more users choose to pay in installments to buy daily necessities. The " buy now, pay later " payment method has ushered in a booming development. At the same time, relatively loose supervision has also led to the rapid growth of the "buy now, pay later" industry.
According to Adobe Analytics, the use of "buy now, pay later" services has tripled at the beginning of this year compared to before the outbreak, and is particularly popular among young consumers. Insider Intelligence predicts that 45.1 million American consumers aged 14 and above will use " buy now, pay later " services in 2021 , an increase of 81.2% over last year .
“Adding Afterpay to Cash App will strengthen our growing network of consumers around the world while providing consumers with a flexible, responsible payment option,” said Brian Grassadonia, head of Square Cash App. “Afterpay will help deepen and strengthen the connection between our Cash App and seller ecosystem and accelerate our ability to deliver a rich suite of commerce capabilities to Cash App customers.”
Square recently launched a banking business that provides checking and savings accounts for small businesses and provides loans. The addition of Afterpay also gives Square an opportunity to expand into the consumer lending field. Square Chief Financial Officer Amrita Ahuja said that Square plans to integrate Afterpay into its consumer cash application and seller products for small businesses, so that even the smallest merchants can offer a "buy now, pay later" option at checkout. Buy now, pay later Square AfterPay |
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