Square, the other tech company run by Twitter founder Jack Dorsey, has agreed to buy Aussie fintech company Afterpay for a cool **$29bn.**
Buy now, pay later
Afterpay is one of a number of companies that makes it easy for consumers to pay for things in installments, rather than all at once, and its popularity has skyrocketed in the last few years, along with a few rivals like Affirm and Swedish company Klarna.
Buy now, pay now (in shares)
Only a small handful of companies have $29 billion of loose cash lying around to spend on an acquisition — and Square isn't one of them. In fact, Square isn't stumping up any cash for the deal, doing the entire thing in equity by offering 0.375 shares of Square in exchange for each share of Afterpay. That's pretty savvy, because the value of a share in Square has more than quadrupled since the start of 2020 as the pandemic turned out to be great for its digital payment solutions and investing products.
It's all coming together
Buy now pay later is hardly a radical new idea. Traditional financing options for cars, phones, fashion and of course homes have existed for literally hundreds of years. All Afterpay does it make it really easy for its 16 million users to defer payments at the point of sale, while charging no interest or fees (unless they miss a payment). For Square this deal means they can now offer the Afterpay feature to its thousands of merchants, and give Afterpay users the ability to manage their payments in Cash App, Square's digital payments app.
