Square Acquires BNPL Provider Afterpay for $29 Billion

Square Acquires BNPL Provider Afterpay for $29 Billion

August 5, 2021

Square entered the Buy Now Pay Later (BNPL) space with an enormous splash this week when it agreed to buy Afterpay—one of the pioneers in the space—for $29 billion. Melbourne, Australia-based Afterpay was founded in 2014 and enables consumers to pay for online purchases in installments without incurring interest.

Square becomes the most recent payments company to launch or acquire a BNPL offering, competing with PayPal, Apple and Visa (which launched a pilot BNPL program several weeks ago), among others. According to U.K.-based consultancy Juniper Research, by 2026, consumers will spend $995 billion via BNPL, up from $266 billion globally today.

“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,” said Jack Dorsey, co-founder and CEO of Square. “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.”

While there are several models being employed by BNPL providers, Afterpay makes its money from transaction fees charged to merchants and late fees from consumers who fail to pay their balance off in four installments. Critics have charged that the unregulated nature of BNPL is a magnet for fraud, and the payment method is being targeted by criminals in innovative ways.

The companies expect the deal to close in the first quarter of 2022.

Previous-Article-CNP  Next-Article-CNP

Learn More...

Karisse Hendrick Feature: BNPL Buy Now Pay Later

 

  • Share this Article:
DJ Murphy

Lastest Fraud News