Square’s Afterpay buy OK’d: BNPL players rapidly “becoming like PayPal” 

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he shareholders of Afterpay have given their thumbs up to Square acquiring the fintech company for $29bn. Twitter founder Jack Dorsey’s side-hustle is one step closer to creating a financial super-app that doesn’t just provide payment and cryptocurrency solutions, but may soon also cut into the fashionable buy-now-pay-later (BNPL) industry. 

Square’s acquisition of Afterpay also marks a trend where big financial players are muscling into the BNPL sector and existing BNPL providers are responding by expanding their own offering outside instalment services.  

“BNPL is becoming much more than spreading the cost of purchase,” Jaimini Pattani, retail banking analyst at GlobalData, tells Electronic Payments International.  

“It is now about providing a complete and unique shopping and, in the case of Klarna, a banking experience to customers. Klarna has rapidly expanded its services benefiting retailers and customers. It’s clear that Klarna is aiming for a super-app style product and other players in the market are recognising this.”  

Square seemingly has a similar idea. Dorsey founded the payment company in 2009. It now has a market capitalisation of $116.5bn. Having originally offered card readers for mobile devices, the venture has since expanded its services to include business financing, person-to-person money transfers and bitcoin trading. The Afterpay acquisition will see it add BNPL services to its offer. 

Square made its intentions to acquire Afterpay known in August. The fintech company said the acquisition was expected to be completed by the end of March 2022. With the shareholders having voted for the deal to go through, the two companies are now just waiting on approval from regulators.