U.S. payments giant PayPal Holdings Inc (PYPL.O) said it would acquire Japanese buy now, pay later (BNPL) firm Paidy in a $2.7 billion largely cash deal, taking another step to claiming the top spot in an industry witnessing a pandemic-led boom.
The deal tracks rival Square Inc’s (SQ.N) agreement last month to buy Australian BNPL success story Afterpay Ltd (APT.AX) for $29 billion, which experts said was likely the beginning of a consolidation in the sector.
The BNPL business model has been hugely successful during the pandemic, fuelled by federal stimulus checks, and upended consumer credit markets.
These alternative credit firms make money by charging merchants a fee to offer small point-of-sale loans which shoppers repay in interest-free instalments, bypassing credit checks.
