U.S. payments giant PayPal Holdings Inc has acquired Japanese buy now, pay later (BNPL) firm Paidy in a $2.7 bln largely cash deal, according to a report by Reuters on Wednesday.

  • The deal follows rival Square Inc’s (SQ.N) agreement last month to buy the Australian BNPL success story Afterpay Ltd for $29 billion that expects to commence consolidating the sector.
  • PayPal stated that the acquisition will expand PayPal’s capabilities, distribution, and relevance in the domestic payments market in Japan, complementing the company’s existing cross-border e-commerce business in the country.
  • The purchase of Paidy will help PayPal to expand in a country whereby online shopping volume has more than tripled over a decade to nearly $200 billion, but over two-thirds of all purchases are still paid for in cash.
  • Paidy provides payment services that allow Japanese shoppers to make purchases online and then pay for them each month at a convenience store or through bank transfer.

The U.S. payments firm is among the big winners of the pandemic as more consumers used its services to shop online and pay bills to avoid going outside. PYPL up +1.43%.