Jack DorseySquare, a cryptocurrency-friendly digital payment company, is expanding its competition with global payment giants such as PayPal by acquiring a major Australian lending company.
square Announce On Sunday, the company has signed a plan to implement a contract to acquire all the issued shares of the financial technology company Afterpay in a $29 billion transaction. The transaction is based on the closing price of Square common stock and is expected to be paid for all shares in the first quarter of 2022.
The acquisition allows Square to further accelerate its strategic plans for the payment ecosystem, as the company is seeking to integrate Afterpay into its seller and cash application business units to implement “buy before pay” (BNPL) services.
BNPL transactions are also known as installment loans, allowing customers to pay bills in a small portion within a fixed period of time, and are actively pioneered by global financial companies such as PayPal, MasterCard, Klarna, and Citi.
According to the announcement, the integration will enable small businesses to provide BNPL at checkout, allowing Afterpay consumers to manage their installment payments directly in the Cash App and discover BNPL discounts directly in the app. This integration marks a new milestone for Square in meeting consumers’ growing need to move away from traditional credit.
Dorsey, Square’s co-founder and CEO, said that the acquisition will help the two companies achieve their common mission to make the financial system more accessible, fair and inclusive. “Together, we can better connect our Cash App and seller ecosystem, provide merchants and consumers with more attractive products and services, and let them regain power,” he pointed out.
As part of the transaction, Afterpay’s co-founders and senior managers will join Square and help lead Afterpay’s related merchant and consumer businesses in Square’s seller and cash application ecosystem. Square also agreed to establish a secondary listing on the Australian Securities Exchange (ASX) to allow Afterpay shareholders to trade Square shares through ASX’s CHESS depositary interest.
As the news broke, Square announced significant second-quarter earnings, Report growth of 200% In Bitcoin (Bitcoin) income. Square’s Bitcoin service generated a gross profit of $55 million, an increase of 223% year-on-year, while the Cash App generated a gross profit of $546 million, an increase of 94%.