Buy-Now, Pay-Later Market Consolidation Heats Up



PayPal Buys Paidy for $2.7 Billion

The buy-now, pay-later market is heating up with PayPal (PYPL) making the latest move, spending $2.7 billion to acquire Paidy, a Japanese BNPL startup. The deal comes a few weeks after Square (SQ) purchased Afterpay for over $29 billion. Meanwhile, late last month, Amazon (AMZN) struck a deal with Affirm (AFRM) to let customers make installment payments on purchases of $50 or more.

The BNPL market has been around for several years but has taken off during the pandemic as more people than ever shopped online. BNPL companies including Afterpay, Affirm, Paidy, and QuadPay charge merchants a fee to enable customers to make installment payments on small purchases at the point of sale.

PayPal Expands Its International Footprint

While PayPal is seen as one of the leaders in the BNPL space, its move to expand into Japan, the third largest ecommerce market in the world, may have been prompted by Square’s acquisition of Afterpay and resulting bigger presence in Australia. To maintain its lead, PayPal has to enter more large markets. Japan seems like a good place to start. Online shopping sales in the country have surged to $200 billion.

Paidy lets customers make purchases online and pay for them with cash in convenience stores located across Japan. They can also pay via a bank transfer through the service.

Currently, Paidy has more than 6 million registered users.

Dealmaking Heats Up

Once the deal closes, Paidy will operate as a standalone business, retaining its brand and management team. The company uses its in-house technology to gauge borrowers’ ability to pay back the short-term loans.

The BNPL market has been heating up in recent months as dealmaking and partnerships abound. This trend makes sense. Many younger consumers are reluctant to make purchases on credit, concerned about the idea of paying interest. BNPL provides an interest-free way to make a purchase in installments. With the popularity of BNPL poised for continued growth, it will be interesting to see which payment company strikes a deal next.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS21090901


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.


TLS 1.2 Encrypted
Equal Housing Lender