Digital payments giant Square is to acquire Australian ‘buy now, pay later’ provider Afterpay as the instalment lending market continues to heat up.
The 29 billion US dollar (39 billion AU dollar) deal is Square’s biggest acquisition to date and is expected to be paid all in stock.
The acquisition will see Afterpay integrated into Square’s current payment ecosystem, which comprises its Seller and Cash App platforms.
Square said ‘buy now, pay later’ presents an “attractive opportunity” supported by “shifting consumer preferences away from traditional credit”.
As of June, Afterpay serves more than 16 million consumers and nearly 100,000 merchants globally.
Afterpay eyes global expansion
“Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles,” said Square co-founder and CEO Jack Dorsey in a statement.
Dorsey, who is also the founder of Twitter, continued: “Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”
For Afterpay, the acquisition will help it further accelerate its growth both in the US and globally.
It will also “offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers”.
“We are fully aligned with Square’s purpose and, together, we hope to continue redefining financial wellness and responsible spending for our customers,” said Anthony Eisen and Nick Molnar, Afterpay co-founders and co-CEOs.
“The transaction marks an important recognition of the Australian technology sector as homegrown innovation continues to be shared more broadly throughout the world. It also provides our shareholders with the opportunity to be a part of future growth of an innovative company aligned with our vision.”
The closing of the transaction is expected in the first quarter of calendar year 2022.