PayPal acquires buy now, pay later provider Paidy

The Japanese company has 4.3 million active accounts.

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SAN JOSE, CA - APRIL 09:  A sign is posted outside of the PayPal headquarters on April 9, 2018 in San Jose, California. PayPal is looking to offer basic banking services including Federal Deposit Insurance Corp. insurance for customer balances, a debit card and direct-deposit.  (Photo by Justin Sullivan/Getty Images)
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PayPal is continuing its push into buy-now-pay-later (BNPL) services with the acquisition of Japanese company Paidy for 300 billion yen ($2.7 billion), Bloomberg has reported. That represents its second largest acquisition to date after the $4 billion dollar purchase of online coupon aggregator Honey

BNPL services let users divide purchases into multiple payments without paying any interest. Instead, PayPal and other providers make money by charging fees to merchants when a consumer buys a product, much as credit card providers do. PayPal's move follows Jack Dorsey's Square much larger acquisition of Australian BNPL firm AfterPay for $29 billion. 

Paidy differs from other BNPL firms in that it allows Japanese consumers to purchase items online and then pay them off in person at local convenience stores. PayPal doesn't currently offer a BNPL service in Japan, so the acquisition will help it break into that market. 

“Paidy pioneered buy-now-pay-later solutions tailored to the Japanese market,” said PayPal Japan chief Peter Kenevan. “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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