The mobile payments market is set to explode. Last year, Apple Pay and Android Pay brought in combined revenues of over $22 billion, and this year we will see even more mobile payment services boasting their own proprietary solutions. With cash slowly dying out in stores, companies are looking to cryptography to compete with cash.
Afterpay is an Australian-based company offering a payment solution for small, frequent transactions. They’ve partnered with BPAY to offer a cardless payment method. With its new acquisition, Square will become the top payment processor in Australia, which is what will allow it to compete with the likes of Apple Pay and Google Pay.
Afterpay, a subsidiary of Afterpay Pty Ltd, is the largest electronic payments company in the Australian online payment and ecommerce space.
By purchasing a large Australian loan business, Jack Dorsey’s cryptocurrency-friendly digital payments startup Square is increasing rivalry with global payment heavyweights like PayPal.
Square said on Sunday that it has signed a scheme implementation agreement for a $29 billion deal to buy all of the outstanding shares in fintech startup Afterpay. The transaction will be paid in all shares in the first quarter of 2022, depending on the closing price of the Square common share.
Square will be able to accelerate its strategic ambitions for payment ecosystems as a result of the purchase, as the firm intends to incorporate Afterpay into its Seller and Cash App business divisions to provide a “buy now, pay later” (BNPL) solution.
BNPL transactions, also known as installment loans, enable consumers to pay a bill in tiny installments over a certain period of time and were pioneered by major financial companies such as PayPal, Mastercard, Klarna, Citi, and others.
The connection, according to the release, would allow small companies to provide BNPL at checkout, enabling Afterpay customers to manage their installment payments directly in Cash App and find BNPL offers immediately inside the app. Square has reached a new milestone in its efforts to satisfy increasing customer demand for alternatives to conventional credit.
The purchase, according to Square co-founder and CEO Dorsey, would help the businesses achieve their common goal of making the financial system more open, fair, and inclusive. “By working together, we can further integrate our Cash App and Seller ecosystems to offer even more attractive goods and services for merchants and customers, reclaiming control,” he said.
DeFi on Bitcoin: Square’s new division, according to Jack Dorsey, will make it happen
Afterpay’s co-founders and top executives will join Square as part of the deal, and will assist develop the company’s associated merchant and consumer businesses inside Square’s Seller and Cash App ecosystems. Square has also agreed to open a secondary listing on the Australian Securities Exchange (ASX), allowing Afterpay owners to trade Square shares on the ASX via CHESS depositary interests.
Square recently announced significant second-quarter results, including a 200 percent increase in Bitcoin (BTC) sales. Square’s Bitcoin services made a gross profit of $55 million, up 223 percent year over year, while Cash App made a gross profit of $546 million, up 94 percent.
Square , the mobile payments company backed by Goldman Sachs and Google , has agreed to buy Australian fintech startup Afterpay for $29 billion in the largest US-listed initial public offering in Australia’s history. The IPO was backed by a host of global investors including Wellington Management and Melbourne-based Macquarie Capital . The deal marks the latest in a string of acquisitions for the rapidly expanding payments company, which has also acquired popular mobile app Venmo and a stake in peer-to-peer payments firm P2P.. Read more about afterpay (asx) and let us know what you think.
This article broadly covered the following related topics:
- what is fintech
- fintech jobs
- what is afterpay
- fintech products
- consumer fintech