PayPal acquires Japan’s Paidy for $2.7B to crack the buy-now, pay-later market in Asia   – ProWellTech

PayPal Holdings, the US fintech company, announced the acquisition of Payy, a Japanese service platform that will now be bought and paid for later (BNPL), for around $ 2.7 billion (300 billion yen), mostly in cash , to strengthen its business in Japan.

The transaction is expected to close, including regulatory approval, in the fourth quarter of 2021.

After the acquisition, the Japan-based company will continue to run its existing business and maintain the brand while executives, Paidy President and CEO Riku Sugie and Paidy Russel Cummer’s founder and chairman of the board, retain their positions.

Japan is the third largest e-commerce market in the world, and as such, this is a significant step by PayPal in gaining more market share both in the country and in the region, particularly in providing deferred payment services as an alternative to credit cards.

PayPal has played with payment cards for a long time – users can upload details of their cards to PayPal and use it as a kind of digital wallet to manage how they pay with it online – but it actually started out as a payment platform in itself, where people have PayPal accounts can deposit and withdraw. Paidy in this sense is a strengthening of PayPal’s first-party rails, which offers the possibility of “owning” this flow of money on one’s own infrastructure without involving the card networks.

Paidy is basically a two-way payment service that acts as an intermediary between consumers and merchants in Japan. Using machine learning, it determines a consumer’s creditworthiness related to a particular purchase, and then it takes over those transactions in seconds and guarantees payments to merchants. Consumers then make payments to Payy for these goods.

Paidy’s platform, which offers a monthly “3-Pay” branded installment payment service, enables shoppers to make purchases online and then pay each month in a consolidated bill at a supermarket or by bank transfer.

“Paidy pioneered” buy now, pay later “solutions for the Japanese market and quickly became the leading service that developed a sizeable two-way platform for consumers and merchants,” said Peter Kenevan, Vice President and Head of Japan at Paypal.

Paidy has more than 6 million registered users and there are plans to integrate PayPal and other digital and QR wallets with Paidy Link to connect more online and offline merchants.

In April 2021, Japan-based company launched Payidy Link, which allows users to link digital wallets to their Payidy account. PayPal was the first digital wallet partner to be integrated with Payy Link.

“PayPal was a founding partner of Paidy Link and we look forward to creating even more value together,” Sugie said in a statement.

“Japan has been a dynamic environment for our growth so far and we are honored that the hard work and potential of our team is recognized by a world leader. Together with PayPal, we will continue to fulfill our mission of making shopping easier, ”said Cummer.