Square, Apple identify key targets in Buy Now Pay Later space | WARC | The Feed

Square, Apple identify key targets in Buy Now Pay Later space

With acquisitions and partnerships, big tech firms are training their eyes on the emerging buy-now-pay-later companies, with Square, Jack-Dorsey’s fintech, acquiring Afterpay for $29bn, and Apple expanding its financial services with an Affirm partnership in Canada.

Why it matters

On the surface, this is big player involvement in a fast-growing area spurred on by the acceleration of e-commerce during the pandemic.

But for Square, a payments solution service for businesses, it reflects the competition among B2B firms like Shopify to offer financial services capabilities to merchnts. This kind of short-term, point-of-sale credit offer will now become the offer of Square’s clients, opening up more spending among traditional credit shunning young people.

Details

• On Tuesday, the FT reported that Twitter Founder Jack Dorsey’s other company, Square was buying Australian firm Afterpay in a $29 billion all-stock deal.
• Afterpay, like its European rival Klarna, and US competitor Affirm, offers interest-free instalment payments on relatively small transactions. However, it does charge late-fees.
• Square also operates Cash App, a mobile payment service that also includes cryptocurrency, savings, and investments. Afterpay will also integrate into this offer.
• In the same week, Apple announced a deal with Affirm to offer a BNPL option on its Canadian online and physical retail stores, according to Bloomberg.
• However, there are regulatory concerns surrounding these companies, which are currently enjoying a wild west.

 Sourced from FT, Bloomberg, WARC