What's going on?

PayPal announced this week that it would buy Japanese buy-now-pay-later startup Paidy for $2.7 billion, and the US payment platform is good for it. Honest.

What does this mean?

PayPal started offering its own buy-now-pay-later service last year, and customers have since used it to make $3.5 billion worth of purchases. This deal, then, comes as part of the company�s longer-term plan to push further into the industry. And where better to take the next step than Japan: the Holy Grail of aspirational payment services is both home to the world�s third-biggest online shopping market, and a place where nearly 75% of all in-person purchases are made in cash. That makes it one of the few developed countries where notes still have the edge on digital payments, and means Paidy � which already has 6 million users � has plenty of room left to grow.

Why should I care?

For markets: Competition is kicking off.
Buy-now-pay-later companies can�t seem to put a foot wrong these days, with the market more than tripling in size in 2020 amid the pandemic-fueled ecommerce boom. And things aren�t showing signs of slowing down: Square agreed to buy Aussie buy-now-pay-later firm Afterpay for $29 billion just last month, while Sweden�s Klarna � now Europe�s most valuable startup � saw its valuation quadruple between September and June to hit $46 billion. But that kind of money draws a crowd, and this once-exclusive club is only going to get a whole lot busier�

For you personally: Buy now, pay� now?
Not everyone is delighted with the craze, mind you: regulators are worried that customers are forgetting the �pay later� part of the deal and racking up a pile of debt. And if the companies themselves don�t start doing more to prevent that from happening, those regulators might be more than happy to step in and roll out some profit-damaging measures of their own.