In what is one of the biggest deals ever, Square has announced that it is acquiring Australian buy now, pay later giant Afterpay in a $29 billion all-stock deal, expected to close in Q1 of 2022. Read more here
In the last few years, we’ve seen the rise of buy now, pay later platforms including the likes of Klarna. It’s a sector that is only going to continue to grow with Afterpay alone serving more than 16 million consumers and 100,000 merchants.
It’s a strategic acquisition for Square as they plan to integrate it into their Seller and Cash App business. This will allow their customers to natively offer buy now, pay later services which will increase revenue for everyone and provide consumers greater choice.
It will be interesting to see what the other major payment players do. We’ve already seen Checkout.com invest in Tamara
- the buy now, pay later platform based in Saudi Arabia.
This may very well be the start of big consolidation in the fintech space, and traditional banks should be very worried about being left behind as they can no longer rest on their laurels.
JP Morgan CEO, Jamie Dimon even wrote in his 2020 annual letter
to shareholders about the threat fintech shows and how banks are “playing an increasingly smaller role in the financial system”.