Square agrees to acquire Afterpay for $29 billion in all-share deal

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SYDNEY – Square Inc. has agreed. on an all-share deal valued at nearly $29 billion to acquire Australia’s Afterpay Ltd, an installment payment company that positions its service as a cheaper and more responsible alternative to a credit card.

Square said it plans to integrate Afterpay into its seller and cash app business units, which will allow more retailers to offer so-called buy-now services, and pay later at checkout.

Afterpay technology allows users to pay for goods in four installments without interest, while receiving goods instantly. Customers only pay a fee if they miss the automated checkout, a violation that also leads to their account being closed until the balance is paid. Afterpay says this curbs bad debt, particularly in an economic downturn when job security is precarious and household finances are stretched.

Most of Afterpay’s revenue comes from retailers, who pay a percentage of the value of each order customers place, plus a flat fee. The company is expanding throughout the United States through deals with retailers including Anthropologie and Free People.

“Square and Afterpay have a common purpose,” said Jack Dorsey, Square CEO. “We built our business to make the financial system more fair, accessible and inclusive, and Afterpay has built a trusted brand that aligns with these principles.”

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