“I wouldn't view this (deal) as impacting the U.S. BNPL market but more as PayPal's route into the Japanese market.”
The US-based PayPal Holdings Inc confirms that it is taking over Paidy, a buy now, pay later platform, for $2.7 billion, Reuters reported on Tuesday.
Buying Paidy, PayPal is all set to expand its footprint in the US where online shopping has tripled during the last decade to roughly $ 200 billion. Even though two-thirds of purchases are still paid in cash, the FinTech company is optimistic about its continued growth in the US.
The PayPal-Paidy deal reflects how the pandemic-led boom continues to broaden its horizon. Besides FinTech, the ecommerce and manufacturing sectors have witnessed a major boom during the pandemic.
“I wouldn't view this (deal) as impacting the U.S. BNPL market but more as PayPal's route into the Japanese market,” Kunaal Malde, an analyst at Atlantic Equities, said.
Like Americans, the Japanese also prefer cash over online transactions. However, things have changed in the recent past as the FinTech industry continues to flourish.
“One of the notable things about Japan’s BNPL market compared to the United States or Europe is that most users clear their outstanding balance by the end of the month in one payment. In Japan accumulating debt is more frowned on.”
With all this said, PayPal is eyeing the top spot in an industry experiencing a boom led by the ongoing pandemic.
The quotes used in this piece were extracted from Reuters.