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PayPal Holdings, the American fintech company, announced the acquisition of Paidy, a Japanese buy it now, pay later (BNPL) service platform, for approximately $ 2.7 billion (300 billion yen ), mainly in cash, in order to improve its business in Japan.
Completion of the transaction, including regulatory approval, is expected in the fourth quarter of 2021.
Following the acquisition, the Japan-based company will continue to operate its existing business and maintain the brand while executives, Paidy CEO Riku Sugie and Paidy Founder and CEO Russel Cummer, will retain their positions.
Japan is the third largest e-commerce market in the world, and therefore it is an important decision by PayPal to gain more market share both in the country and in the region, especially in the area of supply deferred payment services as an alternative to credit cards. .
PayPal has long played well with payment cards – users can upload their card details to PayPal and use it as a kind of digital wallet to manage the way they pay things online through it – but it does. got its start as a payment platform in itself. , where people could pay in and out of PayPal accounts. Paydy is, in this sense, a reinforcement of the proprietary tracks of PayPal, offering a way to “own” this flow of money on its own infrastructure, without involving the card networks.
Paydy is essentially a two-way payment service, acting as an intermediary between consumers and merchants in Japan. Using machine learning, it determines a consumer’s creditworthiness in relation to a particular purchase, then underwrites those transactions in seconds, guaranteeing payments to merchants. Consumers then make a deferred payment to Payy for these products.
Paidy’s platform, which offers a monthly payment service under the “3-Pay” brand, allows shoppers to make purchases online and then pay them each month on a consolidated invoice at a convenience store or by wire transfer. banking.
“Paidy pioneered buy now, payment later adapted to the Japanese market and quickly grew to be the leading service, developing a significant two-sided platform of consumers and merchants,” said Peter Kenevan, vice president, responsible for Japan at Paypal.
Paidy has over 6 million registered users, and the plan is to integrate PayPal and other digital and QR wallets with Paidy Link to connect other online and offline merchants.
In April 2021, the Japan-based company launched Payidy Link, allowing users to link digital wallets to their Payidy account. PayPal was the first digital wallet partner to integrate with Payy Link.
“PayPal was a founding partner of Paidy Link and we look forward to working together to create even more value,” Sugie said in a statement.
“Japan has been a dynamic environment for our growth to date and we are honored that the hard work and potential of our team is recognized by a global leader. With Paypal, we will be able to continue our mission of simplifying shopping, ”Cummer said.
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