US digital payment platform Square, founded by Twitter boss Jack Dorsey, announced Sunday it will acquire Australia's Afterpay Limited for $29 billion.

Afterpay specializes in the "buy now, pay later" model that offers users staggered payments, often without extra charge.

The fintech application is available in Australia, the United States and Canada, as well as the United Kingdom, France and Italy. It has 100,000 suppliers worldwide and boasts 16.2 million customers.

The merger and acquisition, which is expected to close in the first quarter of 2022, will be done entirely through an exchange of shares and will value Afterpay at approximately $29 billion, according to a joint statement.

After completion of the deal, which offers a 30 percent premium on Afterpay's share price at closing Friday, shareholders will own 18.5 percent of the new company's capital.

"The acquisition aims to enable the companies to better deliver compelling financial products and services that expand access to more consumers and drive incremental revenue for merchants of all sizes," the two groups said in the statement.

"Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive," Dorsey said in the statement. He also serves as the CEO of Square, which operates the mobile payment platform Cash App.

Cash App has a user base of 70 million per year.

"Buy now, pay later has been a powerful growth tool for sellers globally," said Alyssa Henry, head of Square's Seller business, in the statement.

Twitter boss Jack Dorsey also founded Square, which is acquiring Australia's Afterpay for $29 billion Twitter boss Jack Dorsey also founded Square, which is acquiring Australia's Afterpay for $29 billion Photo: AFP / Marco BELLO

 

Square plans to integrate Afterpay's credit services into its existing Seller and Cash App units, which could allow smaller merchants to offer staggered payments at checkout as well.

For Afterpay co-founders Anthony Eisen and Nick Molna, "the transaction marks an important recognition of the Australian technology sector as homegrown innovation continues to be shared more broadly throughout the world."

Square also announced in early July it was working on a real-world wallet for safely pocketing bitcoin cryptocurrency.

Hardware wallets can be used to store digital currency offline, synching with applications for transactions on the internet as needed.

Another option for cryptocurrency owners is to use "virtual" wallets, essentially trusting third parties to keep money safe and using passwords to access funds.

Dorsey reasoned on Twitter that bitcoin is a currency for the masses, and that it is important to have ways for people to hold it that don't involve entrusting it to outside parties.

He envisioned a bitcoin wallet that makes it easy for people to use some of it for shopping, for example through smartphones, while protecting the rest of the cryptocurrency.

And in March, Square unveiled it was buying a controlling stake in Tidal, the streaming music platform created by a group led by rap star Jay-Z.

Dorsey explained the goal was to find "new ways for artists to support their work."