PayPal to Acquire BNPL Player Paidy for $2.7 Billion

PayPal announced plans today to acquire Japan-based Paidy, a payments company with a buy now, pay later (BNPL) offering that facilitates transactions for both merchants and consumers. The deal is expected to close for $27 billion (¥300 billion) in the fourth quarter of this year.

PayPal’s purchase will work alongside its existing ecommerce business in Japan, which is the third largest ecommerce market in the world. Paidy will also expand PayPal’s capabilities, relevancy, and distribution in Japan’s domestic payments market.

“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,” said VP and Head of Japan at PayPal, Peter Kenevan. “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.”

Paidy was founded in 2008 and enables its six million registered users to make purchases online without the use of a debit or credit card. Instead, Paidy operates on a BNPL model by billing customers for all purchases at the end of each month. Payments can be made via bank transfer or in-person using cash at a convenience store.

This model works not only for ecommerce purchases, but also for brick-and-mortar transactions. The company’s Paidy Link tool was launched earlier this year and allows customers to link digital wallets, including PayPal, to make purchases using the digital wallet but make payment via Paidy. For PayPal, Paidy’s model that circumvents credit and debit card rails is a good thing. It enables PayPal to own the payment flow (and the revenue that comes with it).

“Paidy is just at the beginning of our journey and joining PayPal will accelerate our plans to expand beyond ecommerce and build unique services as the new shopping standard,” said Paidy President and CEO Riku Sugie. “PayPal was a founding partner for Paidy Link and we look forward to working together to create even more value.”

Sugie, along with Paidy Founder and Executive Chairman Russell Cummer, will continue to lead Paidy, which will continue to operate and maintain the brand.

Paidy marks PayPal’s 23rd acquisition, following Honey in 2019 and Curv and Happy Returns in 2021. The purchase of Paidy, with its BNPL capabilities, hints at PayPal’s evolution into becoming more of a holistic shopping platform.

Photo by Brett Jordan from Pexels