PayPal is staking its claim in the realm of installment payments.

A sector of the payment industry that has recently begun picking up steam is the “buy now, pay later” sector. Due to the pandemic, more shopping has been going on online than ever before, but younger shoppers are extremely wary of taking on credit card debt to pay for their purchases. As such, these new payment methods allow shoppers to pay for their purchases in installments rather than upfront. Both Amazon and Square recently acquired buy now, pay later companies in order to offer their services on their platforms.

Not one to be left in the dust, PayPal has made a sizable acquisition of their own. Last night, PayPal announced that they would be acquiring Japanese startup company Paidy for a 300 billion yen price tag, which equates to roughly $2.7 billion USD. According to PayPal, this acqusition will allow them to expand their “capabilities, distribution and relevance in the domestic payments market in Japan, the third largest e-commerce market in the world.”

Paidy will maintain its own separate branding in Japan, as well as its current management team. “Paidy is just at the beginning of our journey and joining PayPal will accelerate our plans to expand beyond e-commerce and build unique services as the new shopping standard,” Riku Sugie, the company president and CEO, said in a statement.

PayPal Stock Gains On $2.7 Billion Deal For Japan's 'Buy Now, Pay Later' Group Paidyhttps://t.co/XBy83z4gb2@mdbaccardax$PYPL

— TheStreet (@TheStreet) September 8, 2021

Since its founding in 2008, Paidy has become a major force in the Japanese market, reaching a maximum user count of over 6 million. Users of the service can make their purchases online as normal, but instead of paying the entire sum up front, they can pay in monthly installments either through a bank transfer or at a local supported convenience store. The PayPal acquisition will be a major payday for Paidy, more than double of its previous valuation of $1.2 billion.