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02/01/2022

Square offers buy now, pay later following merger

Dan Berthiaume
Senior Editor, Technology
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Square is entering the BNPL space.

As the result of an acquisition made by its parent company, Square is providing buy now, pay later” (BNPL) functionality to sellers using Square Online for e-commerce in the U.S. and Australia.

Square parent company Block, formerly Square Inc., has officially completed a $29 billion acquisition of Afterpay that it initially entered in August 2021, and is launching its first integration with Afterpay. The integration will enable Square sellers to offer Afterpay’s BNPL experience to their customers. Afterpay is available as of Tuesday, Feb. 1 to eligible Square sellers, who can try Afterpay for no extra cost until May 10.

Sellers can access Afterpay from their Square Online dashboard and opt-in to receive early access to Afterpay now, with automatic enablement rolling out to eligible Square Online sites over the following weeks. Afterpay can be toggled on or off via sellers’ Square Online dashboards at any time.

During the promotional period, Afterpay transactions are processed at sellers’ standard e-commerce processing rates. Square sellers receive their full earnings from each sale immediately, while consumers pay over four interest-free installments. Afterpay will also soon be available on Square's developer platform and for in-person payments. 

Founded in 2015, Afterpay is one of the best-known companies — along with Klarna and Affirm — in the fast-growing flexible payments or ‘buy now, pay later’ space, whose growth is being driven largely by younger consumers shopping online. (Flexible payments allow customers to divide payment of retail and online payments into installments.)

[Read more: ‘Buy now, pay later’ Afterpay acquired in $29 billion deal]

Afterpay serves more than 16 million consumers and nearly 100,000 merchants globally, including major retailers across fashion, homewares, beauty, sporting goods and more, according to Square. Square said it plans to integrate Afterpay with its existing Seller and Cash App solutions, “enabling even the smallest of merchants" the ability to offer buy now, pay later services at checkout, among other offerings.

Afterpay co-founders Anthony Eisen and Nick Molnar have joined Square upon the completion of the deal to help lead Afterpay’s respective merchant and consumer businesses, as part of Square’s Seller and Cash App ecosystems.

“In joining with Square, Afterpay can now more meaningfully give small and midsize sellers the tools to attract young, engaged shoppers who prefer Afterpay and help these sellers compete alongside businesses of all sizes,” said Nick Molnar, Afterpay co-founder and now Afterpay lead at Square. “And this is just the beginning. As part of Square’s powerful ecosystem, we look forward to continuing to more deeply integrate the Afterpay platform to unlock even more value for sellers across the world in the coming weeks and months.”

“We’re thrilled to offer Afterpay to Square sellers on day one. This is truly just the beginning of what we’ll be able to offer sellers, and their buyers, through this acquisition,” said Alyssa Henry, head of Square. “Our mission is to help sellers never miss a sale, operate more efficiently, better manage cash flow, and improve growth, retention, and acquisition of buyers. Afterpay helps us further this mission. It will also help bring more businesses of all sizes into the Square ecosystem.”