U.S. fintech giant PayPal Holdings Inc (NASDAQ: PYPL) expects to launch its “buy now, pay later” (BNPL) option in Australia this June to win market share from market leader Afterpay Ltd (OTC: AFTPF) (OTC: AFTPY), Reuters reports.
- So far, PayPal’s BNPL option was restricted to U.S. and Britain, accounting for over $750 million of transactions by the December quarter-end.
- The U.S. payments giant intends to extend its interest-free “Pay in 4” service to over 9 million customers in Australia, where the regulation norms are less strict with higher adoption than other markets.
- PayPal is estimated to offer stiff competition to domestic market leaders Afterpay and Zip Co Ltd, along with Sweden’s Klarna backed by a small shareholding from Australia’s largest bank.
- PayPal admitted receipt of requests from multiple Australian merchants and businesses after its BNPL service’s offshore launch last year.
- PayPal intended to capitalize on its deep nexus with Australian merchants under competitive grounds.
- However, concerns loom over the perpetration of anticompetitive practices considering its strong nexus with Australian merchants.
- The market is yet to gauge PayPal’s market expansion strategy, which could be via creating a niche customer base or by snatching market share from existing players.
- Shares of Afterpay, which got hammered by the global tech sell-off in recent weeks, were up over 8%, while Zip lost 3.6% toward the end of the trading day.
- Price action: PYPL stock was up 1.32% at $244.94 in the pre-market session on the last check Wednesday.
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