Tag: pay later

PayPal heats up buy now, pay later race with $2.7 billion Japan deal, BFSI News, ET BFSI

Banking & Finance

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FILE PHOTO: The PayPal logo is seen at an office building in Berlin, Germany, March 5, 2019. REUTERS/Fabrizio Bensch

US payments giant PayPal Holdings Inc said it would acquire Japanese buy now, pay later (BNPL) firm Paidy in a $2.7 billion largely cash deal, taking another step to claim the top spot in an industry witnessing a pandemic-led boom.

The deal tracks rival Square Inc’s agreement last month to buy Australian BNPL success story Afterpay Ltd for $29 billion, which experts said was likely the beginning of a consolidation in the sector.

The BNPL business model has been hugely successful during the pandemic, fuelled by federal stimulus checks, and upended consumer credit markets.

These alternative credit firms make money by charging merchants a fee to offer small point-of-sale loans which shoppers repay in interest-free instalments, bypassing credit checks.

Heavyweights like Apple Inc and Goldman Sachs are the latest heavyweights that have been reported to be readying a version of the service.

Paypal, already considered a leader in the BNPL market, also entered Australia last year, raising the stakes for smaller companies such as Sezzle Inc and Z1P.AX Co Ltd, stocks of which were down in midday trading on Wednesday.

“The acquisition will expand PayPal’s capabilities, distribution and relevance in the domestic payments market in Japan, the third largest ecommerce market in the world, complementing the company’s existing cross-border ecommerce business in the country,” PayPal said in a statement on Tuesday.

After the acquisition, Paidy will continue to operate its existing business and maintain its brand. Founder and Chairman Russell Cummer and President and Chief Executive Riku Sugie will continue to hold their roles in the company, PayPal said.

The Financial Times had reported last month that Paidy was considering becoming a publicly listed company.

The transaction is expected to close in the fourth quarter of 2021, and will be minimally dilutive to PayPal’s adjusted earnings per share in 2022.

BofA Securities was the sole financial adviser to PayPal on the deal, and White & Case was lead legal adviser. Goldman Sachs advised Paidy, and Cooley LLP and Mori Hamada & Matsumoto provided it legal counsel.

(Reporting by Anirudh Saligrama in Bengaluru; Writing by Sayantani Ghosh; Editing by Ramakrishnan M. And Kim Coghill)



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Flipkart sees double-digit growth on pay later transactions; crosses 42 million mark, BFSI News, ET BFSI

Personal Finance

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Flipkart, India’s homegrown e-commerce marketplace, plans to expand its Flipkart Pay Later credit offering, targeting a 2x growth over the next six months. Currently, there are over 2.8 million customers who have adopted Flipkart Pay Later and have made more than 42 million transactions on the platform to date.

Owing to the growing reliance on digital payments, Flipkart Pay Later has seen a 70% adoption rate among customers at the time of check-out and plans to cross the 100 million transaction benchmark by the end of the year.

As digital adoption continues to increase across the country and customers seek value-driven credit options, Flipkart Pay Later has seen an increase of over 50% in the number of registered users as of July 21 in comparison to the previous year. Customers have used the offering mainly for purchases across categories of beauty and general merchandise, home and lifestyle. In fact, in categories such as lifestyle, Flipkart Pay Later has exceeded the credit card transactions, making it the top prepaid instrument used by consumers for the category.

“As a homegrown platform, enabling accessibility and affordability for customers is at the heart of all our offerings. The success of Flipkart Pay Later so far has shown the benefits that the construct is able to provide to millions of customers and made us confident of its market-readiness for a much wider adoption – both on and outside Flipkart Group’s platforms.” said Ranjith Boyanapalli, Head – Fintech and Payments Group at Flipkart.

Flipkart plans to expand the reach of its ‘Pay Later’ construct to make credit available not just on Flipkart’s platform but on other partner channels as well.



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Freecharge launches ‘Pay Later’ for its customers

Banking & Finance

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Freecharge has launched ‘Pay Later’ facility for its customers.

“The expenses get aggregated for a month and customers can pay at the end of the month, in a seamless manner,” it said in a statement on Tuesday, adding that it can be used both on Freecharge’s platform as well as on a network of over 10,000 online and offline merchants.

Using Pay Later, customers can pay their electricity bills, recharge their mobiles, order food, medicines, grocery online without the need for any card.

“Unlike other digital payment options, Pay Later does not require remembering or saving card numbers, loading wallet or any OTP approvals. All the payments can be done through a secure one click process,” it further said.

On successful onboarding on Pay Later, customers receive a monthly credit limit of up to ₹5,000 and this usage limit gets enhanced in the future, depending on the customer’s profile.

“The facility enables our customers to pay for their small-ticket purchases both online and offline with mobile being the form factor, rather than cash or cards,” said Siddharth Mehta, CEO, Freecharge.

A processing fee and a small interest are levied for the usage. However, the interest will be credited back to the customer’s Freecharge wallet in the form of a ‘Cashback’ on the repayment of the Pay Later bill at the end of the month, the company said.

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