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Square to Purchase Australia-Based Afterpay in a $29M Deal

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Square to Purchase Australia-Based Afterpay in a 29M Deal

American financial services and digital payments company Square Inc. has entered into an acquisition deal with buy-now, pay-later (BNPL) Australian FinTech company Afterpay. The deal is a scheme implementation deed worth $29 million. Reportedly, this is Square’s largest acquisition to date, and the companies are set to complete the transaction in Q1 2022.

According to the news release, this agreement will see Square purchase all shares that Afterpay has issued. The acquisition seeks to help both companies offer better financial services and products. As a result of this improvement, the firms will be able to tap into a broader customer base and increase revenue for merchants of all sizes.

Commenting on this deal, Square’s CEO, Jack Dorsey, said both Square and Afterpay share a common purpose of introducing fairness, accessibility, and inclusivity to the financial system. He added that connecting Square’s Cash App Seller ecosystem would help put the power back into the hands of consumers and merchants by facilitating the creation of compelling products.

Reportedly, Afterpay’s integration means Square’s Seller and Cash App business units will let even the smallest merchants offer a BNPL checkout option. For consumers, this deal means they can manage their installment payments seamlessly via Cash App. They will also get a chance to discover merchants and BNPL offers within Cash App.

A Mutually-Beneficial Agreement

Per Brian Grassadonia, the Lead of Square’s Cash App business,

Afterpay will help deepen and reinforce the connections between our Cash App and Seller ecosystems, and accelerate our ability to offer a rich suite of commerce capabilities to Cash App customers.

Through this acquisition, Square’s Cash App will get an additional 16 million users and approximately 100,000 merchants that currently use Afterpay. Additionally, BNPL will offer Square a chance to persuade consumers, especially the young ones, to shift away from traditional credit.

On the other hand, Afterpay will get an opportunity to expand into the US and across the globe. According to Afterpay’s co-founder and co-CEOs, Anthony Eisen and Nick Molnar, this agreement will provide the company access to a new category of in-person merchants.

They added that this transaction recognizes the Australian technology sector as the world continues adopting innovation from the country. On top of this, Eisen and Molnar believe this deal offers shareholders an opportunity to participate in the future growth of an innovative company that aligns with Afterpay’s vision.

As part of this agreement, both Eisen and Molnar will join Square once the transaction is completed. Their roles will be leading Afterpay’s merchant and consumer businesses once they are integrated into Square Seller and Cash App ecosystems. Apart from Eisen and Molnar, Square also intends to appoint one Afterpay director as a board member once the deal is done.

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Jinia is a fintech writer based in Sweden focusing on the cryptocurrency market and blockchain industry. Besides Cryptotelegram, she has been writing for some renowned publications such as Cointelegraph, Invezz, etc for years. She also has experience in writing about the iGaming industry.

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