Square To Buy 'Buy Now, Pay Later' Giant Afterpay in $29 Billion Deal

In a blockbuster deal that rocks the fintech world, Square announced today that it is acquiring Australian buy now, pay later giant Afterpay in a $29 billion all-stock deal. From a report: The purchase price is based on the closing price of Square common stock on July 30, which was $247.26. The transaction is expected to close in the first quarter of 2022, contingent upon certain closing conditions. It values Afterpay at more than 30% premium to its latest closing price of A$96.66. Square co-founder and CEO Jack Dorsey said in a statement that the two fintech behemoths "have a shared purpose."

"We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles," he said in the statement. "Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands." The combination of the two companies would create a payments giant unlike any other. Over the past 18 months, the buy now, pay later space has essentially exploded, appealing especially to younger generations drawn to the idea of not using credit cards or paying interest and instead opting for the installment loans, which have become ubiquitous online and in retail stores.

Is it just me?

[Gravis Zero]

Anyone ease read headlines about "Square" and think they are talking about the video game company now named Square Enix? I've played enough RPGs back in that Square seems to forever be a video game company to me.

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[DontBeAMoran]

Same here. "Why the fuck would Square buy a payment system company?"
Followed of course by "What the fuck is Afterpay?"

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[edi_guy]

From Afterpay's website:

"Weve pioneered a better way to pay. No external credit checks, no interest, no fees when you pay on time, "

And here's the kicker, but you have to dig deep into the help section of the website: "Late fees for shoppers in the USA are capped at 25% of the order value. "

Holy f---. You get to pay a 25% tax(!) on your purchase to Afterpay?I get that is the max, but sounds usury to me.

If you are short of cash, and cannot get credit (due to your credit history or income) the chances are

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[q_e_t]

So basically this company feeds off of bad decision makers.

They aren't necessarily bad decision makers. If your washing machine dies you may have the option of finding the time to go to a laundrette (assuming there is one nearby), spending time washing clothes there, and getting back, and paying a significant amount to do so to the extent that your ability to save up to buy a new one is compromised. And who watches the kids in the meantime? It can actually be the smarter move to get a new washing machine this way as you can watch the kids and spread the payments an

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[igreaterthanu]

The minimum is $0. There's no problem as long as you don't default.

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[_merlin]

No, the main way they make money is from the fees they charge merchants for using the service. The late payment fees for customers are a relatively small revenue source for them.

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[arosenfield]

I'm a big Square Enix fan and had to think for a moment about this headline to figure out exactly whom the subject was. But this happens often enough where I've remapped Square = payments and Square Enix = video games in my mind.

The companies chose confusingly similar names, and headline writers write imprecise headlines, so it's on readers to figure out from context what was meant.

Square, Inc. is the full name of the US payments company founded in 2009; Square Co., Ltd. was the Japanese video game company

seriously, $29B?

[algaeman]

What is this company's revenue? How many decades is it going to take to get ROI on that?

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[phalse phace]

Info isn't hard to find

https://www.wsj.com/market-data/quotes/AU/XASX/APT/financials/annual/income-statement

For 2020, revenue was AUD $519.151 million (USD $382,422,097). That's an increase of 96.56% from AUD $264.112 million (USD $194,552,770) in 2019 which itself is an increase of 85.54% from AUD $142.345 million (USD $104,855,569) in 2018

But that isn't as important (IMO) as the fact that they're not yet profitable. Not a surprise.

2020 net loss was AUD $19.780 million (USD $14,570,537) which is an improve

WTF is Afterpay?

[DontBeAMoran]

"Afterpay Limited is an Australian financial technology company operating in Australia, the United Kingdom, Canada, the United States, and New Zealand."

Really? Because I'm Canadian and I've never heard of them before today.

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[Vomitgod]

Over 20 million site visits oer month....

yep "nobody has heard of them"

https://www.similarweb.com/web... [similarweb.com]

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[DontBeAMoran]

20 million visits per month for the whole of Australia, the United Kingdom, Canada, the United States, and New Zealand. That's small potatoes and it's also probably mostly recurring visits from their already established users.

seems high

[MooseTick]

$29B seems high for what's basically a credit card company that no one has heard of. Discover is only worth $37B and they've been around 35+ years.

What's square?

[SlashDotCanSuckMy777]

Never heard of it.

Zero-interest loans?

[GPS Pilot]

appealing especially to younger generations drawn to the idea of not using credit cards or paying interest and instead opting for the installment loans

So these are zero-interest loans?

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[Admiral Krunch]

appealing especially to younger generations drawn to the idea of not using credit cards or paying interest and instead opting for the installment loans

So these are zero-interest loans?

Just make sure you pay on time ;)

Notice

[AlexHilbertRyan]

Has anyone noticed the big companies are all parasites, taking a cut and actually doing very little else. Google and their ads, Amazon selling stuff for themselves and others and taking a cut, etc. Its always the same.