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Block (SQ) Acquires Afterpay, Boosts BNPL Market Position

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Block (SQ - Free Report) has been consistently working toward expanding its presence in the buy now, pay later (BNPL) market.

This is evident from the company’s recent acquisition of the pioneering BNPL platform named Afterpay.

Afterpay empowers both merchants and customers. It enables merchants to offer the pay later option to customers. It has nearly 1 lakh global merchants across various verticals like fashion, homewares, beauty and sporting goods.

Meanwhile, Afterpay helps customers to shop while maintaining their finances. It has 16 million customers across APAC, North America and Europe.

With the latest acquisition, Block aims to strengthen its Square and Cash App ecosystems. SQ also intends to help sellers of all sizes provide the BNPL option to customers during checkout.

With Afterpay, customers of Cash App can easily find sellers and BNPL offers directly within the app. Also, Afterpay customers can seamlessly manage their installment payments in the Cash App.

Block Inc. Price and Consensus

Block Inc. Price and Consensus

Block Inc. price-consensus-chart | Block Inc. Quote

BNPL Initiatives

Along with the acquisition, Block took immediate steps to launch its first integration with Afterpay. The company provided Afterpay’s BNPL capability to all sellers using Square Online for e-commerce in the United States and Australia.

With BNPL initiatives, Block aims to cater to the needs of customers who are increasing their preferences for BNPL services. According to a survey conducted by Ascent, 55.8% of the respondents in the United States have used the BNPL service, which increased 48% from July 2020 to March 2021.

Further, it has positioned itself well to strengthen its position in the growing BNPL market. Pera report by Research and Markets, the global BNPL market is expected to hit $20.4 billion by 2028, witnessing a CAGR of 22.4% between 2021 and 2028.

Competitive Scenario

Given the upbeat scenario of the BNPL market, Block — carrying a Zacks Rank #4 (Sell) — faces intense competition from other players including PayPal (PYPL - Free Report) , Affirm (AFRM - Free Report) and Visa (V - Free Report) that are making strong efforts to penetrate this booming market.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PayPal recently made an announcement to acquire a Japan-based BNPL solution provider, Paidy, in exchange for $2.7-billion cash. Paidy enjoys a solid momentum among customers in Japan, which will help PayPal expand its presence in the country’s digital payment market.

Apart from the Paidy buyout, PayPal recently made its BNPL solution, named the Pay in 4 service, available to eligible customers in Australia. Further, the company has stopped charging late fees for missed payments on BNPL products. This is also made available for new customers availing Pay in 4 in the United States, Pay in 3 in the U.K. and Pay in 4X in France.

Affirm has been gaining momentum in the BNPL market with strategic partnerships. It recently collaborated with Amazon to provide installment payment services to shoppers on the latter’s platform. It has also partnered with Shopify. Per the collaboration, all merchants of the United States enrolled in Shopify will be able to avail Affirm’s Shop Pay Installments to gain more customers and grow their business.

Further, Affirm has introduced its services to Australia in a bid to penetrate the Asia Pacific region. For this, the company joined forces with the leading interactive fitness platform named Peloton. The partnership enables customers in Australia to pay over time for Peloton’s Bike and Bike+ at 0% APR over 12, 24, 39 or 43 months.

Visa’s growing initiatives to bolster its presence in the BNPL market remain noteworthy. V’s BNPL facility named Visa Installments comprises three installment models — namely Pre-Purchase, During Purchase and Post-Purchase — to help customers with flexible payments.

The company recently rolled out its installment service in Australia in partnership with ANZ, one of the country’s largest financial institutions. With the help of this service, shoppers in the country can avail the BNPL facility during checkout with their ANZ credit cards. Visa previously introduced the BNPL service in the United States, Canada, Russia and Malaysia.


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