Payments company Square is acquiring Australian buy now, pay later (BNPL) fintech Afterpay for approximately US$29 billion (A$39 billion).
California-headquartered Square, led by Twitter’s Jack Doresey, plans to integrate Afterpay’s BNPL capabilities into its payment apps for merchants and consumers, potentially benefiting some 70 million annual transacting active Cash App customers and millions of sellers.
This will enable merchants of all sizes to offer BNPL at checkout, give Afterpay consumers the ability to manage their installment payments directly in the Square Cash App, and give those same users the ability to discover merchants and BNPL offers directly within the app.
Following completion of the deal in Q1 2022, Afterpay’s co-founders and co-chief executive officers, Anthony Eisen and Nick Molnar, will join Square and help lead the acquired fintech’s respective merchant and consumer businesses. One of its directors will also join the Square board.
Commenting on the acquisition, Dorsey, who is co-founder and chief executive officer of Square, says: “Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles.”
“Together, we can better connect our Cash App and seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”
‘Redefining financial wellness and responsible spending’
Founded five years ago in Sydney, Australia, Afterpay serves 16 million consumers and nearly 100,000 merchants globally across Australia, the US, Canada, the UK, where it is called Clearpay, and New Zealand.
The fintech’s unique selling point is the service is completely free to use if repayments are made on time.
Customers who miss a payment are locked out of the service until they are up to date and late payment fees are charged but are fixed, capped and do not accumulate over time.
Eisen and Molnar say in a joint statement: “By combining with Square, we will further accelerate our growth in the US and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers. We are fully aligned with Square’s purpose and, together, we hope to continue redefining financial wellness and responsible spending for our customers.”
“The transaction marks an important recognition of the Australian technology sector as homegrown innovation continues to be shared more broadly throughout the world. It also provides our shareholders with the opportunity to be a part of future growth of an innovative company aligned with our vision.”