The BNPL industry is anticipated to rack up USD680 million in transaction volume by 2025.

Japan: USA fintech company PayPal Holdings is set to acquire Paidy, a leading two-sided payments platform and provider of buy now, pay later (BNPL) solutions in Tokyo for USD2.7 billion (300 billion yen). The acquisition will strengthen PayPal’s market share in both countries, especially in the postpaid services sector as well as complement the company’s cross-border e-commerce business. Paypal’s decision to consolidate with the Japanese unicorn comes a month after rival Square Inc. took over the Australian BNPL payment platform, Afterpay Ltd. for USD29 billion. 

The Buy Now, Pay Later business has accelerated due to the upended credit markets, federal stimulus checks, and surge in e-commerce exacerbated by the pandemic. The consolidation is PayPal’s attempt to gain a top spot in the rising BNPL industry in Japan, the world’s third-largest market for online shopping. 

Founded in 2008, Paidy has currently 6 million registered users and is one of Japan’s start-ups worth more than USD1 billion. However, the online payment service company started zero-interest post-payment last year when the global BNPL market exploded in popularity. Post-acquisition, Paidy will continue to operate its existing business by supporting a wide range of customers across marketplaces. The integration of Paidy with the Fintech giant will also expand the company’s reach to online and offline merchants beyond its platform and establish strategic relationships with leading global brands.

On the acquisition deal, PayPal Japan Vice-President commented, “Paidy pioneered buy now, pay later solutions tailored to the Japanese market and quickly grew to become the leading service, developing a sizable two-sided platform of consumers and merchants.” He further stated, “Combining Paidy’s brand, capabilities, and talented team with PayPal’s expertise, resources, and global scale will create a strong foundation to accelerate our momentum in this strategically important market.”

Addressing the rising number of consolidations in the online payment service industry, TechSci Research Director said, “Buy now, pay later solutions are becoming popular as alternative methods of financing, which has exacerbated competition among financial services companies. So, consolidations among BNPL providers are inevitable as online service platforms aim to take a larger share in the booming BNPL industry and drive incremental revenue.”

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