Digital payments company Square Inc. says it has consented to buy Afterpay, which gives a “buy now, pay later” choice for merchants, in an all-stock arrangement valued at about $29 billion.
Square permits retailers to handle Mastercard transactions utilizing gadgets that plug into tablets or smartphones. The San Francisco-based company said Sunday it intends to incorporate Afterpay into its services, empowering merchants to offer clients the alternative to pay for merchandise later without depending on a credit card. Afterpay clients would have the option to deal with their installment payments directly using Square’s cash app.
“Square and Afterpay have a common perspective,” Square CEO Jack Dorsey said in a statement.
About 70 million individuals utilize Square’s cash app. As of June 30, Afterpay was serving in excess of 16 million clients and almost 100,000 merchants, including significant retailers, the company said.
Installment plans are popular with retailers since they urge clients to spend more cash. Furthermore, they empower clients with insufficient funds or credit at the time of procurement to purchase the items they need. Payments are made in different installments over time, without interest — except if clients are late, in which case extra charges or interest might kick in.
“Afterpay is profoundly dedicated to assisting individuals to spend responsibly without administration expenses for the individuals who pay on schedule,” the company said in a joint official statement reporting the transactions.
Square said it consented to purchase the entirety of the Australian company’s shares. Afterpay shareholders will get 0.375 shares of Square Class A common stock for each share of Afterpay, a 31% premium over its closing price Friday.
The transaction is expected to close in mid-2022.
