Afterpay Ltd, an early adopter of the ‘buy now, pay later (BNPL)’ concept, was recently acquired by Jack Dorsey’s Square Inc for a staggering US$29 billion, making it the biggest purchase of an Australian company to date. In the buy now, pay later (BNPL) market, Afterpay is a category leader. Retail clients can divide up purchases into four separate, interest-free installments using the company’s primary service. Square will appoint an Afterpay director to its board of directors after the deal is completed. The acquisition will finalize in the first quarter of 2022, according to Square and Afterpay.
Headquartered in Australia, Afterpay has over 16 million users globally and approximately 100,000 merchants. However, merchants and customers are drawn to BNPL for more than only the basic technology. For both buyers and sellers, the company acts as a central e-commerce hub. Square, best known for its popular Cash App, has announced plans to integrate Afterpay’s existing apps. Square recently began its financial services, which include meager business checking and savings accounts along with loans. Afterpay’s inclusion allows the digital payments company to grow into consumer loans, something it does not currently provide. The change will present smaller merchants’ options too, such as buy now, pay later at checkout, among other things.
When the two businesses come together, they will form a payments behemoth like no one. The buy now, pay later field has surged in popularity in the last 18 months, particularly among younger people who are lured to the idea of not paying interest or using credit cards and instead preferring installment loans, which have become commonplace online and in retail outlets.
Services like Afterpay, Affirm, and Klarna, which allow you to buy now and pay later, have become increasingly popular on the internet. Square may not be the only payments juggernaut to enter the fray; Apple is rumored to be working on a similar service unofficially named “Apple Pay Later.”
Reported by: Imaaz Nadeem
Written by: Mishaal Muzaffar