Square Plans to Acquire Afterpay

Square plans to buy Afterpay as it plans to develop further into the booming installment loan market. Jack Dorsey’s payments company announced the $29 billion, all-stock deal on Sunday evening. The price tag marks a roughly 30% premium to Afterpay last closing price.

Square CEO Dorsey said that the square and Afterpay have a shared purpose. They are planning to build our business to make the financial system more fair, accessible, and inclusive, and the Australian fintech company has built a trusted brand aligned with those principles. Shares of Afterpay in Australia surged on that news and closed nearly 19% higher on Monday.

Square pointed to consumers eschewing traditional credit, especially younger buyers. The San Francisco-based payments company already offers installment loans, which it said has been a powerful growth tool for Square’s core seller business. The company integrates with the fintech company into both its seller and Cash App ecosystems.Square CFO Amrita Ahuja said that the squeak on the Street, the company sees the acquisition as an opportunity to create a more powerful e-commerce platform. The platform appeases growing consumer interest in transparent buying opportunities and offers new ways for merchants to serve their customers.

Square also announced its second-quarter results on Sunday, ahead of the previously planned release on Wednesday. Gross profit increased 91% from a year ago, which marked a record quarterly growth rate for the payments company. Cash App profit was up 94%, while sellers jumped 85% from a year ago. Net revenue excluding bitcoin came in at $1.96 billion for the quarter, an 87% rise year over year. The company’s Venmo competitor, Cash App now has 40 million monthly transacting active customers.