Paidy sees listing as “buy first, pay later” and become popular in Japan


Fintech Update

Japanese financial technology “unicorn” Paidi is considering becoming a listed company “Buy first, pay later” trend Most in the world Obsessed with cash According to its founder, society.

The company is backed by ITOCHU Corporation, PayPal, and Goldman Sachs. It is one of the few “unicorns” in Japan and was valued at US$1.3 billion when it raised US$120 million in March.

Market participants and investors expect Paidy to apply for an IPO in Tokyo this year, although the company insists that there is no specific timetable for listing.

“We have access to capital. In our business, access to credit lines is also important, and we did, but at the same time, every company has matured and reached the point where it makes sense to become a public company,” Paidy’s founder Russell Cummer, told the Financial Times.

According to the former Goldman Sachs credit trader who founded the startup in 2008, BNPL is catching up in Japan, albeit at a slower pace than the world, and its popularity has surged globally due to the online shopping boom driven by the pandemic.

“For us, this market is still too early,” Cummer said. “But this is the first time that Japan has a real BNPL service.”

Since 2014, Paidy has provided a post-payment service that allows shoppers to pay for one month’s purchase in the next month. In October, it launched a service that allows consumers to divide the cost of goods into three equal parts without interest-this is Japan’s first zero-interest installment service.

About half of Paidy’s 6 million account holders are women between the ages of 18 and 34, and the service is accepted by most e-commerce sites and merchants, including Amazon, Shopify, Apple, and Rakuten.

Globally, BNPL is a crowded market with large companies such as Sweden’s Klarna, Silicon Valley’s Affirm and PayPal.Payment company Square has also joined the competition Its $29 billion all-stock transaction Acquired Afterpay in Australia, and Apple is also exploring the market.

However, in Japan, the volume of transactions completed through postpayment services in fiscal year 2020 is still relatively small, at 882 billion yen ($8 billion), although Yano Research Institute predicts that this number will more than double by fiscal year 2024. Reached 188 million yen.

Japan’s BNPL trend is based on a similar global argument that millennials and Gen Z consumers do not trust traditional credit, but still hope Borrow money to buy things.

But reflecting the country’s dependence on cash, Japanese consumers have developed a unique e-commerce habit. They usually have a credit card but choose to use cash on delivery or online shopping through convenience stores and bank transfers.

The heavy reliance on cash on delivery has brought a logistics nightmare to merchants, and has also made refunds and returns difficult.

Paidy takes full advantage of this consumer behavior, allowing shoppers to open an account and obtain short-term credit immediately with just an email and mobile phone number. Despite a simple credit check, the company claims that the late fee is less than 5% of its revenue, which consists of merchants and settlement fees.

“Compared to the typical BNPL, Paidy is now a more basic part of Japan’s e-commerce infrastructure,” Cummer said.


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