SAN FRANCISCO (AP) – Digital payments company Square Inc. says it has agreed to acquire Afterpay, which gives merchants a “buy now, pay later” option in an all-stock deal valued at approximately $ 29 billion offers.
Square said Sunday it had agreed to buy all of the shares in the Australian company and that the estimated value of the transaction was based on the closing price of Square’s common shares last Friday.
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Square enables retailers to process credit card transactions with devices that plug into tablets or smartphones. The San Francisco-based company said the acquisition is expected to close in early 2022.
The company plans to integrate Afterpay into its services so that merchants can offer their customers the option of paying for goods later without a credit card. Afterpay users could manage their installment payments right in Square’s Cash app.
“Square and Afterpay have a common purpose,” Square CEO Jack Dorsey said in a statement.
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About 70 million people use Square’s Cash app. As of June 30, Afterpay served more than 16 million users and nearly 100,000 merchants, including large retailers, the company said.
Installment payments are popular with retailers as they encourage customers to spend more money. And they allow customers who do not have sufficient credit or credit at the time of purchase to leave a store with the item they want. Payments are made in multiple installments without interest over time – unless customers are late, in which case additional fees or interest may apply.
“Afterpay is deeply committed to helping people spend money responsibly without incurring service fees for those who pay on time,” said a joint press release announcing the deal.
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