PayPal acquires Japanese ‘afterpay’ giant Paidy

Payment service PayPal has acquired the Japanese Paidy, a payment platform that facilitates post-payment in Japan. PayPal pays converted about 2.3 billion euros for the payment service. With the purchase, PayPal wants to become a bigger player in Japan.

Paidy pioneered the buy now, pay later principle in Japan, explains PayPal in a message to investors. The service allows Japanese online shoppers to purchase a product and pay in three monthly installments with no interest with a coupon at supermarkets or by bank transfer. The company maintains data on each customer’s credit score, and it helps instill confidence in customers and merchants by acting as an intermediary and guaranteeing payments to merchants.

The company was founded in 2008. Paidy now has more than six million registered users in Japan. The brand will continue to exist as its own brand and business, but will do so under the wings of PayPal. Paidy’s leadership also remains the same. The big difference is that PayPal will help Paidy grow, among other things by supporting it with technology, knowledge and the integration of PayPal as a payment method in Paidy. For the time being, there are no plans to release Paidy outside of Japan.

The news of the takeover comes a month after it was announced that Square, the company of Twitter CEO Jack Dorsey, wanted to take over the Australian payment service Afterpay for approximately 24.4 billion euros. That service provides similar services to Paidy and shows PayPal’s interest in the postpay market. In a recent interview with the Financial Times, PayPal CEO Dan Schulman said the brand plans to become a “super app” that will bring together payments, cryptocurrency investments and savings, similar to an app like China’s WeChat.