Square consolidates its positions in the digital payments sector. The company founded by Jack Dorsey has announced the acquisition of the Australian group Afterpay, one of the global players of the “buy now, pay later”, in a transaction of 29 billion dollars carried out in shares.
The acquisition takes place on the basis of a valuation of the Australian company of 126.21 Australian dollars per share, with a premium of 31% compared to the value of last Friday. For Square, known for the mobile credit card reader to be applied to the smartphone, this is the largest acquisition ever made and confirms the strategy of strengthening the connection with merchants in the logic of extracting value from transactions.
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The “buy now, pay later” is a rapidly expanding sector, especially among younger customers, in the field of digital payments, allowing consumers to automatically spread the amount in three or four interest-free installments at the time of purchase. online or in the physical store.
For industry players such as Afterpay, who bear the counterparty risk, revenue comes from partnerships with merchants, usually in the form of fees for each transaction, in exchange for a new marketing and promotion channel.
Square has already explained that it intends to integrate the payment installment services within its Cash App digital payments app, extending the service also to the small merchants who make up the base of its customers.