With the fintech sector booming like never before, fintech start-ups have grown and expanded their businesses by unforeseen magnitude. This expansion includes acquisitions, and this time US-based fintech player PayPal announced that it would be acquiring the Japanese Buy Now Pay Later (BNPL) platform Paidy for nearly $2.7 billion (300 billion yen) principally in cash.
Post the acquisition, Paidy will continue to operate as usual and president and CEO Riku Sugie and executive chairman Russell Cummer will retain their positions.
According to PayPal, the Paidy acquisition will bolster its capabilities, distribution, and relevance in the domestic payments market in Japan (which also happens to be the third-largest e-commerce market in the world) and complement the company’s existing cross-border e-commerce business in the country. Additionally, this will increase PayPal’s market share in Japan.
“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,” said Peter Kenevan, vice president, head of Japan at PayPal. “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.”
The BNPL vertical has grown quite strongly in the wake of the pandemic as individuals are strapped for cash. It is thus of little surprise that it has caught the eyes of the major fintech players of the world, who have changed the landscape by involving BNPL solutions in their product portfolio. PayPal is the latest, but it would certainly not be the last.
With over 6 million registered users, Paidy allows allow users to make online purchases, and then pay for them each month in a consolidated bill at a convenience store or via bank transfer. Acting as a middleman between consumers and merchants in Japan, it uses modern technology like machine learning in order to determine the creditworthiness of a consumer related to a particular purchase. Then it underwrites those transactions in seconds, guaranteeing payments to merchants.
“There is no better home for Paidy to continue to grow and innovate than PayPal, which has been removing friction from online shopping for more than 20 years,” Cummer said. “Japan has been a vibrant environment for our growth to date and we’re honored to have our team’s hard work and potential recognized by a global leader. Together with PayPal, we will be able to further achieve our mission of taking the hassle out of shopping.”
“Paidy is just at the beginning of our journey and joining PayPal will accelerate our plans to expand beyond e-commerce and build unique services as the new shopping standard,” said Sugie. “PayPal was a founding partner for Paidy Link and we look forward to working together to create even more value. Thank you to our community of merchants and users who helped us get to this important milestone.”
