What: Square will buy out Afterpay, an Australian BNPL provider.

Why it is important: Square and Afterpay have the potential to build a very strong payment network that appeals to the younger generation of shoppers.

According to Matrix Partners, BNPL solutions will displace part of the role of credit card debts. As the younger generation is opposed to debt, BNPL is an interest free option that allows users to pay in installments. Against its competition like Affirm and Klarna, Afterpay has always been able to understand Millennial and GenZ customers the best through the right tone and product offerings.

The merger of Square and Afterpay has a lot of potential to deliver value to both consumers and merchants. Currently, Square has built a merchant payment network and, in its portfolio, CashApp offers a customer payment service, but these lines of business have not been integrated. Afterpay will be able to weave all these services together in a single integrated experience.

Congratulations to Afterpay and Square