PayPal’s purchase highlights a rush from the largest worldwide payments providers, PayPal included, to find a way into the BNPL space. The global BNPL market is expected to hit $3.9 trillion by 2030, according to Allied Market Research, expected to register a CAGR of 45.7% between 2021 and 2030.
The release follows recent news that rival Mastercard is partnering with payment processor TSYS to offer issuer-based installment options for cardholders. Visa also provides BNPL via its Visa Installments service, which includes three installments plans named ‘Pre-Purchase,’ ‘During Purchase’ and ‘Post-Purchase,’ according to NASDAQ.
Paidy currently acts as a multi-pronged payments service, using machine learning to evaluate users creditworthiness related to specific purchases, and performing underwriting for these transactions instantly. This model guarantees payments to merchants and allows consumers BNPL services immediately.
The platform offers payment installments split over three months, known as ‘3-Pay,’ and allows customers to pay each month at a convenience store or through bank transfer. Paidy’s 6 million registered users are expected to be integrated into PayPal’s network via Paidy Link, the company’s digital wallet service launched in April 2021.
“PayPal was a founding partner for Paidy Link and we look forward to working together to create even more value. Thank you to our community of merchants and users who helped us get to this important milestone,” Paidy President and CEO Riku Sugie stated in the release.
PayPal previously released its BNPL ‘Pay in 4’ service for the US and Australia, Pay in 4X in France and Pay in 3 in the UK. PayPal has also announced that it is stopping charged late fees for missed payments on BNPL payments starting October 1.
The transaction is expected to be completed following regulatory approval in the fourth quarter of 2021, with Paidy continuing to operate as a separate business brand with its existing executive leadership, according to TechCrunch.
In other recent fintech news, UK super app provider Revolut is planning to add remittance and BNPL services to compete in the US and abroad. Sub-Saharan mobile payments provider Wave also raised Africa’s largest Series A at $200 million to become Francophone Africa’s first unicorn.