Online payment platform PayPal has announced the acquisition of Japanese-based ‘buy now, pay later ‘solutions firm Paidy for approximately $2.7 billion.
In a statement issued on Wednesday, the global payment giant indicated that the acquisition aims to help the company solidify its presence in Japan while building on the country’s e-commerce prowess.
Paidy, also a two-sided payment, will help boost PayPal’s existing cross-border eCommerce business in Japan, it added.
“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,” said Peter Kenevan, vice president, head of Japan at PayPal.
Additionally, Paidy will maintain its existing operations, like retaining its brand and supporting various consumer wallets as part of the acquisition. The statement indicates that the current Paidy management will also continue overseeing operations at the firm.
To finalize the deal, PayPal has tapped BofA Securities as the sole financial adviser while White & Case is the lead legal adviser to the transaction. Elsewhere, banking giant Goldman Sachs is the financial advisor to Paidy.
Through Paidy, Japanese users can purchase goods online and then pay for them each month in a consolidated bill at a convenience store or through bank transfer. To check the creditworthiness of users, Paidy uses proprietary technology, underwriting transactions, and guarantees payment to merchants.
The acquired payment firm has developed products such as the Paidy 3-Pay monthly installment as part of attracting more engagement on the platform. The platform currently has over six million registered users.
Paidy is among the leading players in BNPL sectors, with other fintech platforms contemplating venturing into the space.
For instance, UK challenger bank Revolut is planning to introduce ‘buy now, pay later’ the service to its over 16 million users in a move to become a super app. The service is still in its development stage, and Revolut plans to carry out a pilot in select European markets.