Jack Dorsey’s cryptocurrency-friendly digital payments firm Square is expanding competition with global payments giants like PayPal by acquiring a major Australian lending company.
Square announced Sunday that the firm has entered into a scheme implementation deed to acquire all of the issued shares in fintech company Afterpay in a $29-billion deal. The transaction is based on the closing price of the Square common share and is expected to be paid in all stock in the first quarter of 2022.
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The acquisition enables Square to further accelerate its strategic plans for payment ecosystems as the company is looking to integrate Afterpay into its Seller and Cash App business units to enable a “buy now, pay later” (BNPL) service.
Also referred to as installment loans, BNPL transactions allow customers to pay a bill in small portions throughout a fixed period of time and are actively pioneered by global financial firms such as PayPal, Mastercard, Klarna, Citi and others.
According to the announcement, the integration will enable small businesses to offer BNPL at checkout, allowing Afterpay consumers to manage their installment payments directly in Cash App and to discover that BNPL offers directly within the app. The integration marks a new milestone for Square in meeting the growing consumer demand for shifting away from traditional credit.
Square co-founder and CEO Dorsey said that the acquisition will help the companies to deliver on their shared mission to make the financial system more accessible, fair and inclusive. “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,” he noted.
Related: DeFi on Bitcoin: Jack Dorsey says Square’s new division will make it happen
As part of the transaction, Afterpay’s co-founders and senior executives will join Square and help lead Afterpay’s related merchant and consumer businesses within Square’s Seller and Cash App ecosystems. Square has also agreed to establish a secondary listing on the Australian Securities Exchange (ASX) to allow Afterpay shareholders to trade Square shares via CHESS depositary interests on the ASX.
The news comes amid Square announcing notable second-quarter earnings, reporting 200% growth in Bitcoin (BTC) revenue. Square’s Bitcoin services generated $55 million in gross profit, increasing 223% year-on-year, while Cash App generated a gross profit of $546 million, surging 94%.
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