Twitter founder's payment processor firm acquires Afterpay for $29 billion

[The Buzz]

Square, the payment processing company run by Twitter’s Jack Dorsey, is buying Afterpay for $29 billion in a transaction expected to be completed by the end of March 2022.

Afterpay is best known for its "pay later" service that allows in-store and online customers to purchase a product immediately and pay for it later with four equal repayments. The repayments are interest-free, but if they are not paid every two weeks as required, late fees are accrued. Founded in 2015, it has more than 16 million consumers and nearly 100,000 merchants in its global network and is available in Australia, the U.S., Canada, New Zealand and the U.K.

From Verdict:

“This deal is a major coup for Square, as it brings into the fold a superstar, fast growing company,” Tosin Agbabiaka, fintech investor at Octopus Ventures, tells Verdict.

The deal will enable Square to tap into the instalments segment of the financial services industry, which is expected to be worth $166bn by 2023, according to GlobalData’s Thematic Research.

While Square buying Afterpay will enable it to take a slice out of the highly lucrative BNPL market, the deal also comes attached to a number of challenges.


Firstly, the point-of-sales fintech will have to deal with growing competition from businesses like BNPL quadradecacorn Klarna and payments giants like PayPal.


Secondly, the BNPL market is also facing growing regulatory scrutiny after widespread criticism over how the sector risks putting people’s financial wellbeing at risk.

At the same time, though, Square buying Afterpay will up the pressure on the other companies in the BNPL space.

Dorsey’s side-hustle will face a number of challenges buying the credit company. Firstly, it will have to square off against a lot of competition. Startups and major players are already busy cutting into the instalments sector. Secondly, regulators and lawmakers are increasingly putting the sector in their crosshairs.

Read more here: https://www.verdict.co.uk/why-jack-d...rpay-for-29bn/

[Former Member 14]

$29Bn - not a shabby payout for a 6 year old startup

[bookmaker-osusume]

I would love to make that much money gamblin

[AVC-Invest]

Thanks, very interesting. One thing I will say though is that it is a form of credit and governments are cracking down on this -

The Financial Conduct Authority (FCA) is set to crack down on companies such as Klarna and Clearpay after the number of BNPL transactions across the UK tripled last year.

Source - https://www.cityam.com/startups-urge...er-regulation/

[Cash Bonus]

That's quite good and I'm pleased for them. It's a huge acquisition.

[Former Member 14]

That's quite good. Another news article puts the price considerably higher at $10 billion more.

https://www.google.com/amp/s/amp.smh...02-p58eyn.html

SMH... Syd Morning Herald has converted the US$29bn into AU$39bn, which amounts for the extra $10bn.

[Cash Bonus]

AussieDave, I apologise for that. It was a misunderstanding on my part. I appreciate you clarifying that for me.