The digital payments app Square plans to acquire Australian installment payments company Afterpay for $29 billion in stock.
The all-stock deal will help the fintechs extend their customer bases and drive revenue for merchants, the companies announced on Sunday. Afterpay offers consumers an alternative to a credit card to make purchases that can be paid over time.
(ticker: SQ) will fold
‘s (ASX: APT) “buy now, pay later” technology into its Cash App and Seller systems, enabling even small merchants to offer the buy now, pay later option at checkout.
The companies expect the deal to close by the first quarter of next year.
Square co-founder and CEO Jack Dorsey, who is also a founder and the CEO of
(TWTR), said in a statement: “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.”
Dorsey added the connection will “deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”
As of the end of June, Afterpay more than 16 million consumers and nearly 100,000 merchants worldwide as customers, including major retailers in fashion, homewares, beauty, and sporting goods segments.
In announcing the deal, Square said that buy now, pay later offers an “attractive opportunity supported by shifting consumer preferences away from traditional credit, especially among younger consumers, consistent demand from merchants for new ways to grow their sales.”
Square stock has dropped 4.6% to $236 in premarket trading Monday.
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