According to PayPal, the deal is aimed at boosting its presence in the domestic payments market in Japan, the third-largest eCommerce market in the world. The transaction completion, including the regulatory approval, is expected in the fourth quarter of 2021.
Paidy is basically a two-sided payments service, acting as a middleman between consumers and merchants in Japan. Using machine learning determines the creditworthiness of a consumer related to a particular purchase, and then it underwrites those transactions in seconds, guaranteeing payments to merchants. Consumers then make deferred payments to Paidy for those goods.
“Paidy pioneered buy now, pay later solutions tailored to the Japanese market and quickly grew to become the leading service, developing a sizable two-sided platform of consumers and merchants,” said Peter Kenevan, Vice President, Head of Japan at PayPal.
Paidy’s platform, which offers a monthly payment installment service branded “3-Pay”, enables shoppers to make purchases online and then pay for them each month in a consolidated bill at a convenience store or via bank transfer.
PayPal’s purchase of Paidy will “expand PayPal’s capabilities, distribution and relevance in the domestic payments market in Japan,” the company said in the release.