PayPal to Buy Japan’s Paidy for $3.67 Billion

PayPal Holdings Inc. agreed to buy Japanese “buy now, pay later” startup Paidy Inc. for about $2.7 billion, in a move that will boost its business in the world’s third-largest e-commerce market.

The transaction adds to a flurry of activity involving companies that let consumers pay for purchases in instalments, as an alternative to traditional forms of credit. In August, Square Inc. said it would buy Australia’s Afterpay Ltd. for about $39 billion, while Affirm Holdings Inc. entered a partnership with Amazon.com Inc., sending the financial-technology group’s shares soaring.

U.S.-listed PayPal says it has more than 400 million consumers and merchants in more than 200 markets. Its business has grown rapidly with the shift from cash and in-store card spending to digital payments and e-commerce. PayPal has used the pandemic’s shift toward contactless payments to push into big chain stores via QR codes.

In the second quarter, PayPal handled more than $400 billion of payments for the first time in its history.

PayPal will pay for Paidy primarily in cash, it said late Tuesday. It expects the deal to close in the fourth quarter and to minimally dilute earnings per share, as measured on a non-GAAP basis, or not in line with generally accepted accounting principles.

Paidy lets Japanese shoppers make purchases online and then make monthly payments in a consolidated bill at a convenience store or via bank transfer.

The company uses proprietary technology to score creditworthiness, underwrite transactions and guarantee payment to merchants, and says its 3-Pay monthly installment offering has more than 6 million registered users.

Paidy will continue to operate its existing business, retain its own brand, and continue to be led by Russell Cummer, founder and executive chairman, and Riku Sugie, president and chief executive.

Paidy’s backers include George Soros’s sons Jonathan and Robert. In April, Paidy said it had raised a total of $120 million of so-called Series D funding from the two men’s family offices, JS Capital Management LLC and Soros Capital Management LLC, as well from the investment managers Tybourne Capital Management Ltd. and Wellington Management.

BofA Securities Inc. acted as financial adviser to PayPal, while Goldman Sachs Group Inc. advised Paidy.

South Australia is currently the strongest state or territory economy in the country, with economic activity 9.1 percent above its decade-average in the December quarter, according to CommSec research. NSW was second with economic output running 8.6 percent above its long-run average, followed by Victoria with 8.5 percent, the ACT at 8.3 percent and Western Australia at 6 percent.

Economic activity in both Queensland and Tasmania was 4.5 percent above average while the Northern Territory underperformed its long-term average by 0.5 percent.

The CommSec research ranks states and territories on several key economic metrics and compares the latest quarterly data with each area’s decade average. South Australia ranks first on four of the eight key indicators. They are economic growth, unemployment, construction and dwelling starts.

Western Australia ranks first on population growth and business and equipment investment. Population growth has been a key element in Perth and regional Western Australia becomingthe country’s hottest property markets over the past 12 months. CoreLogic figures released this week show home values are up 21.1 percent in Perth and 13.3 percent in the state’s regions.

Despite high inflation, retail spending remained above the long-term average in all states and territories in the December quarter. The ACT led with retail expenditure 12.2 percent higher than its long-term average, followed by Western Australia with 11.3 percent, Victoria at 11.2percent and Queensland at 11.1 percent.

Queensland is in the top spot for new home loans. Propelling this is very strong internal migration and a doubling of the First Home Owners Grant to $30,000 from 20 November last year. New home loans issued to first home buyers in November surged to a 15-month high, according to data from the Australian Bureau of Statistics. Queensland is currently the second strongest housing market, with home values up 16.1 percent in Brisbane and 11.2 percent in regional areas over the past year.

In all states and territories except the Northern Territory, housing finance commitments remained above decade averages in the December quarter. The value of home loans in Queensland was 21.1 percent higher than the state’s long-term average. The next strongest was Western Australia, up 17.5 percent, South Australia, up 14.2 percent, and the ACT, up 12 percent. The new CoreLogic data reveals 15 consecutive months of growth in the national median price, despite high interest rates.

PayPal to Buy Japan’s Paidy for $3.67 Billion

It’s the latest in a flurry of deals involving ‘buy now, pay later’ companies

CommSec research reveals this state is leading the country in economic growth, unemployment, construction and dwelling starts