Payment service provider PayPal acquires the Japanese Buy-Now-Pay-Later (BNPL) service Paidy  for $2.7 billion in cash. In a nutshell, Paidy enables consumers shop online and pay for all their purchases once a month in a store or by bank transfer. In addition, its own software is used to check the creditworthiness, conclude transactions based on machine  learning and guarantee payments to merchants.

With this service, Paidy has gained six million registered users so far and established strategic partnerships with international brands and online marketplaces. The acquisition is also intended to technically connect Paidy with PayPal and thus expand its reach. In addition, Paidy wants to grow beyond the eCommerce sector anddevelop new services fora new shopping service. 

Paidy and PayPal had previously worked together with regard to “Paidy Link”. Such cooperations in the operational business, often lead to investments or takeovers especially if the larger partner recognizes the speed and innovative strength of the smaller partner and expects advantages for their own business. Nevertheless, experience has shown that it is important to maintain the degrees of freedom of the junior partner and not to integrate them into the buyer’s organization in order not to slow down innovation and creativity.