International Finance

PayPal agrees to buy Japanese BNPL firm Paidy for $2.7 bn

The transaction and the regulatory approval is expected to be completed by the end of 2021

US-based payment giant PayPal has announced that they acquired Japanese Buy Now Pay Later (BNPL) firm Paidy for $2.7 billion mostly in cash, to enhance its business in Japan. The deal is expected to be completed by the end of 2021, according to media reports.

After the acquisition, the Japan-based company will continue to operate its existing business and maintain the brand and Paidy’s president and CEO Riku Sugie and founder and executive chairman Russell Cummer will retain their positions in the company.

Paidy aids Japanese shoppers to make purchases online, and then pay for them each month in a consolidated bill at a convenience store or via bank transfer. It uses proprietary technology to score creditworthiness, underwrite transactions and guarantee payment to merchants.

Paidy was launched in 2014 and at present, the firm has close to six million registered users. In April this year, the company raised $120 million in a Series D funding round. Japan is considered to be the third-largest e-commerce market in the world and this move by PayPal is significantly important to gain more market share both in the country and the region, specifically in the area of providing deferred payment services as an alternative to credit cards.

Peter Kevan, VP, head of Japan, PayPal, told the media, “Combining Paidy’s brand, capabilities and talented team with PayPal’s expertise, resources and global scale will create a strong foundation to accelerate our momentum in this strategically important market.”

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