Square Is All Set To Acquire Fintech Company Afterpay

The pro-crypto digital payments firm owned by Jack Dorsey, Square is getting ready for competition on a global scale with the likes of PayPal and Payoneer by acquiring Afterpay, a major Australian lending company.

The announcement was made on Sunday by Square that “an implementation deed for the acquisition of Afterpay including all its issued shares has been set in a $29 billion deal.” The transaction was calculated based on the closing price of the common share of Square, and the worth is expected to be paid all in stock in Q1 2022.

The acquisition deal will help Square accelerate its strategic payment ecosystems plans further as the firm is looking to integrate the Australian fintech into its Cash and Seller App units to kickstart a service tagged “BNPL – Buy Now, Pay Later.”

The BNPL transactions, which are also called installment loans, allow customers to settle their bills in smaller portions for a fixed period. This kind of service was pioneered by the likes of Citi, PayPal, Klarna, Mastercard, and others.

From the announcement, the new integration will help small-scale businesses to offer BNPL at their checkout point, enabling Afterpay users to manage their installment payments straight from the Cash App and also discover the available BNPL offers through the app. For square, this integration is a new milestone in meeting up the increasing shift from traditional credit as demanded from customers.

The CEO of Square and also the co-founder said the new acquisition would allow the companies to meet up their common mission of making the financial system more inclusive, accessible, and fair for people. “Together, we can better the seller ecosystems with our cash app to ensure the delivery of more compelling products and services for consumers and merchants, returning power to their hands.” He noted.

As part of the deal, the co-founders of Afterpay and the senior executives will join Square and lead the related consumer businesses and merchants of Afterpay within the Cash App and Seller ecosystems of Square.

Also, Square agreed to create a secondary listing of Square on ASX (Australian Securities Exchange) to allow the previous Afterpay shareholders to trade Square shares on ASX through CHESS depositary interests.

The acquisition news, however, came amid the 200% revenue growth made earlier by Square as the second-quarter earnings through BTC. The BTC services run by Square generated a whopping $55 million gross profit-making a 223% increase on yearly comparison and a 94% growth from the Cash App after generating $546 million.