PayPal, the online payments giant, has announced plans to acquire Paidy, a Japanese ‘buy now, pay later’ (BNPL) firm, for $2.7bn, according to reports.
BNPL businesses work by charging merchants fees in return for offering small point-of-sale loans which customers repay in instalments that are interest-free, thereby avoiding credit checks.
The BNPL market, of which Paypal is considered a market leader, has boomed during the pandemic with the help of US federal stimulus cheques.
With more people moving to shopping online because of the pandemic, and businesses quickly setting up online shops to meet the demand, Paypal has also been one of the winners of the pandemic and has over 400m active accounts globally, according to Reuters.
The US payments company’s plans to acquire Paidy, “will expand PayPal’s capabilities, distribution and relevance in the domestic payments market in Japan, the third largest ecommerce market in the world, complementing the company’s existing cross-border ecommerce business in the country,” the company said in a statement on Tuesday, according to Reuters.