Buy Now Pay Later: Dorsey’s Square acquires Australia’s Afterpay for whopping $29 billion

Twitter CEO Jack Dorsey co-founded digital payment company Square acquired Afterpay, an Australian ‘buy now pay later’ (BNPL) kind of service provider.

This deal is said to be one of the biggest ever buyouts made for an Australian company. Square purchased Afterpay for a whopping $29 billion in stock.

It has also been reported by top officials that Square shall undergo a secondary listing on the Australian Securities Exchange market. This is majorly done to ensure that Afterpay shareholders can trade in shares through CHESS Depositary Interests.

“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. Together we can better connect our ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands,” said Jack Dorsey

After the announcement, Afterpay’s shares surged by a record 19%. A buyout of such a large scale will ensure that the founders of Afterpay shall receive a paycheck of at least USD$1.8 billion each. Even Tencent Holdings, one of the investors in Afterpay who had acquired a stake worth 5% for roughly AUD$300 million will receive a paycheck of USD$1.7 billion Australian dollars.

This deal seems to be of perfect timing and mutually beneficial to both parties as Dorsey’s Square has been keen on providing a similar buy now and pay later service for their Cash application and at the same time Afterpay has been finding means and ways to accelerate its growth in the United States.

“Acquiring Afterpay is a ‘proof of concept’ moment for buy now, pay later, at once validating the industry and creating a formidable new competitor for Affirm Holdings Inc, PayPal Holdings Inc and Klarna Inc. We expect Square will invest heavily to integrate Afterpay and accelerate organic revenue growth,” said Truist Securities analysts.

However such existing giants in the field aren’t its only competitors. A report by Bloomberg has suggested that Apple and Goldman Sachs are joining hands in building a buy now, pay later (BNPL) service platform. Square will have to truly up its game in order to compete and survive these giants.