In an astonishing deal worth 300 billion Yen (US$2.7 billion), Paypal has now assimulated the Japanese ‘buy now, pay later’ provider Paidy. This comes at a time where Payal is seeking to increase it’s market share in Japan with a focus on cross-border transactions.
Paidy is of interest to Paypal because it maps the full range of payment technologies, including a proprietary system to pre-screen and evaluate customers’ creditworthiness to guarantee payments to merchants. As Paypal writes in a statement, Paidy is able to “quickly develop and bring innovative products to market.” Here, Paypal explicitly mentions the Paidy 3-Pay installment offering, which is the core of Paidy. Customers do not need a credit card to use the service.
The Paidy brand will remain after the acquisition. Paidy will continue to run the business independently. Paidy CEO Riku Sugie and Cummer will continue to lead the company.
The Paidy acquisition is expected to close in the fourth quarter. It will be handled by Bank of America, which is acting as Paypal’s sole financial advisor. On the Paidy side, the deal is being overseen by Goldman Sachs.
Paypal does not anticipate a large loss to shareholders in non-GAAP earnings per share. The acquisition could only have a “minimal dilutive impact” on 2022 earnings, according to Paypal.