Mobile payments platform Square announced on August 1 that it had agreed to purchase Australian fintech company Afterpay in a $29 billion all-share deal. Following the completion of the purchase, Afterpay customers will gain access to an array of additional financial tools, including Bitcoin purchasing and money transfers.
Afterpay is a “buy now, pay later” service that allows consumers to purchase an item and pay for it over eight weeks in fortnightly interest-free instalments. The company was founded in Sydney in 2015 and has disrupted the consumer credit industry, attracting over 16 million users and nearly 100,000 merchants.
Square has agreed to a court-recommended deal that will see the mobile payments platform purchase all of the issued shares of Afterpay. The transaction has a total value of $29 billion based on the closing price of Square common stock on July 30, 2021. The closing of the transaction is expected in the first quarter of 2022.
A financial juggernaut in the making
Square’s purchase of Afterpay will create an online payments powerhouse and accelerate both company’s growth in key markets, including the United States.
While Square has traditionally focused on small to medium-sized businesses, Afterpay has made its mark with larger sellers. Both have made significant inroads in key markets, including the United States, the United Kingdom and Australia. With the addition of disruptive technology and services offered by both companies, it is not hard to see how their combined efforts could offer a significant threat to traditional financial institutions.
Bitcoin in the hands of Afterpay users
Once the transaction has been completed in mid-2022, Square expects to integrate Afterpay with its Seller and Cash App ecosystems. With this integration, Afterpay users will gain access to a full suite of financial tools, including stock trading and money transfers. It will also allow Afterpay users to purchase and transact with Bitcoin, a move that Square founder and CEO Jack Dorsey hopes will result in the broader adoption of the cryptocurrency.
Square is becoming a powerful advocate for Bitcoin
Square’s plan to introduce bitcoin purchasing to the general Australian public through its purchase of Afterplay is the latest example of Bitcoin advocacy from the company and its founder.
In October 2020, Square purchased $50 million in Bitcoin. In a statement following the purchase, the company explained that it believed that the cryptocurrency was “an instrument of economic empowerment.” Earlier this year, Dorsey announced that he had partnered with rapper Jay Z to create a $23.3 million endowment to fund Bitcoin development worldwide. Square is also working on a hardware Bitcoin wallet to promote the mainstream adoption of bitcoin in less tech-savvy communities.