Square buys Scalapay to offer installment settlement

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On Sunday, Square announced plans to buy Afterpay, an Australian fintech company. company focuses on allowing customers to make payments in four free installments, and if they don’t make an automatic payment, they pay.

More than 16 million Scalapay customers access and manage their fees on the Square Cash App. However, it is not yet possible until the final transfer takes place in the first quarter of 2022.

Square advances its payment option

Cuadrado, founded by Jack Dorsey, was created to develop technology that brings together business services and mobile payments in a single service. For example, your Cash app allows users to send and receive money. It also has a point of sale service that allows merchants to process payments from the comfort of their mobile phones.

Scalapay operates a Buy Now, Pay Later (BNPL), also known as a point of sale loan. platform allows buyers to make a purchase and then pay for it in equal installments with no interest rates or fees. BNPL allows purchases worth up to $ 1,500, making it convenient for users to purchase more expensive items.

Square CFO Amrita Ahuja said the Scalapay acquisition would secure consumer interest in a new transparent and directly manageable buying opportunity. He added that this is an excellent opportunity to develop a powerful e-commerce platform that will work for the customer.

Dominate Wall Street?

In the first two months of this year alone, 2021, BNPL grew 215% year-on-year. According to an Ascent survey, more than half of the US population uses the “buy now, pay later” service to avoid paying interest on credit cards or buying an item outside of their budget.

An analyst at CreditCards.com stated that BNPL is aimed at young adults as it is transgenerational. A survey by Cardify.ai shows that millennials and Gen Z account for 80% of transactions. First of all, the young population is a perfect target, avoiding the additional charges of loan fees. Also, they may want to buy something new but don’t have the money to do so.

According to Oliver Wyman, a management consultant, the companies that offer these services have transacted more than $ 20 billion in the United States alone. Furthermore, the number will only increase and by 2025, Kaleido Intelligence estimates that approximately $ 680 billion in transactions will be made using those quotas.

Wall Street may have found a fair competitor because of the speculated growth of “buy now, pay later” services. As a result, payment service providers like FinTech, American Express, and even payments giant Paypal are crafting their own versions of BNPL to capture the growing market.

Wayne is a Blockchain enthusiast and cryptocurrency trading expert. Currently, he deals with trending topics in digital currencies.

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