The crush of Jack Dorsey – the payment company Square – acquires buy now pay later sweetheart Afterpay for $ 29 billion • The Register


Square, the credit card processing company run by Twitter founder Jack Dorsey, has announced plans to acquire Afterpay, the Australian buy-now-pay-tard (BNPL) company for $ 29 billion.

Afterpay offers buyers the option of purchasing goods and services with four bi-monthly payments. Merchants pay a commission for each Afterpay sale, often at higher rates than those charged by credit card companies. But consumers can use Afterpay for free if they pay on time. Even if bettors miss a payment, the initial late fee of $ 10 may be less than the credit card interest on the same purchase.

Also known as Clearpay in Europe, Afterpay is an Australian company launched in 2015. A business update [PDF] released today reports that it has 16.2 million active customers, 98,200 merchant members, a turnover of 925 million Australian dollars (679 million US dollars) and facilitated 21.1 billion dollars of sales during fiscal year 2021.

Square, which offers credit card processing services to merchants without the need to register with a bank, said it would use the acquisition to give merchants more payment options.

“Square and Afterpay have a common goal. We have built our business to make the financial system more fair, accessible and inclusive, and Afterpay has built a brand of trust aligned with these principles, ”said Jack Dorsey, co-founder and CEO of Square. , in a canned statement.

Although Afterpay has experienced tremendous growth, it faces challenges.

The first is that its BNPL product has been widely emulated. PayPal, for example, was quick to create its own “Pay in 4” offer. A rival named “Klarna” has attracted investment from Chinese group Alibaba. Chinese web giants Baidu and Tencent have added BNPL functionality to their e-commerce offerings. Banks and credit card companies have also begun to be bold in dealing with the threat BNPL poses to their rich stream of commission income and interest payments.

Another challenge is regulatory. BNPL does not meet conventional definitions of consumer debt, which means people in financial difficulty can easily access and borrow beyond their means. Regulators around the world are aware of the risks this poses, and many have started to think about how to ensure BNPL does not escape consumer credit laws.

Square’s statement outlines plans for integrating Afterpay into its existing Seller and Cash App business units, to enable even the smallest merchants to offer BNPL at checkout, giving Afterpay consumers the ability to manage their payments scaled directly into Cash App, and give Cash App customers the ability to discover BNPL merchants and offers directly in the app. “

Cash App is a peer-to-peer payment tool with over 70 million users, so Afterpay’s reach will expand significantly once the transaction is closed.

The transaction is expected to be carried out in Square shares and to close in the first quarter of calendar year 2022. ®


Source link

Previous RateSetter helps Metro Bank's consumer credit business grow by 256 pc
Next Caitlin Rose Announces Reissue of Own Side Now for 10th Anniversary | Nashville Cream

No Comment

Leave a reply

Your email address will not be published. Required fields are marked *