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With the Paidy acquisition, PayPal gets a strong footing into the world’s third-largest e-commerce market. This deal will help PayPal to expand its capabilities, distribution and relevance in the domestic payments market in Japan.
On Tuesday, September 7, payments giant PayPal Holdings Inc (NASDAQ: PYPL) announced the acquisition of the Japanese payments platform Paidy. The acquisition happened in cash for around ¥300 billion or approximately US$2.7 billion.
Paidy and PayPal
Paidy in Japan has gained popularity as the ‘buy now, pay later’ payments solution. This acquisition will also allow PayPal to expand its footprint in Japan’s payment market. this is a big development considering that Japan is the world’s third-largest e-commerce market.
Thus, Paidy’s acquisition will help PayPal complement its existing cross-border e-commerce business in Japan. Speaking of the development, Peter Kenevan, vice president, head of Japan at PayPal said:
“Paidy pioneered buy now, pay later solutions tailored to the Japanese market and quickly grew to become the leading service, developing a sizable two-sided platform of consumers and merchants. 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.”
As said, the complete acquisition will happen in cash. Besides, the transaction will be completed by the October-December period.
Building Trust among Consumers and Merchants
With its ‘buy now, pay later’ service, Paidy has managed to gain the trust of market players. The payments platform allows Japanese shoppers to make purchases online. They can later pay for them each month via a consolidated bill.
Paidy uses its own proprietary technology to determines shoppers’ creditworthiness as well as assure payments to merchants. It helps consumers feel comfortable while shopping online. It can drive increased conversion rates, average order values and repeat purchases for merchants.
Paidy has been launching several innovative products from time to time. With over 6 million registered users, Paidy has managed to drive customer engagement. Paidy expands its market reach online through Paidy Link which helps it integrate with PayPal and other digital and QR wallets. Russell Cummer, founder and executive chairman of Paidy said:
“There is no better home for Paidy to continue to grow and innovate than PayPal, which has been removing friction from online shopping for more than 20 years. Japan has been a vibrant environment for our growth to date and we’re honored to have our team’s hard work and potential recognized by a global leader. Together with PayPal, we will be able to further achieve our mission of taking the hassle out of shopping.”
PayPal is looking to expand its footprint in the rapidly emerging FinTech space. It has been among the first payments giant to integrate crypto payments into its platform. The company is also willing to launch a stock trading platform in the US.