PayPal expanded its global ‘buy now, pay later’ (BNPL) bet through its planned acquisition of Paidy, a Japan-based BNPL provider.

Why should we care?
The move allows PayPal to get a foothold in Japan’s BNPL market. It comes as other large tech companies boost their BNPL chops, including Square, through its $29B planned acquisition of Australia-based Afterpay; and Affirm’s recent partnership with Amazon. Paidy claims its technology taps artificial intelligence to underwrite consumers based on an assessment of their creditworthiness. It has more than six million users. “Combining Paidy’s brand, capabilities and talented team with PayPal’s expertise, resources and global scale will create a strong foundation to accelerate our momentum in this strategically important market,” Peter Kenevan, head of Japan at PayPal, said in a statement. Despite the enthusiasm around BNPL from banks and payments companies, recent data about U.S. consumers suggests they may need to carefully consider the risks of BNPL bets: A recent survey of 1,044 U.S. consumers from personal finance company Credit Karma found that a third of consumers who used BNPL services fell behind on one or more payments, and 72% said their credit score declined.