Jack Dorsey lauds Afterpay’s ‘ultimate superpowers’ as $39bn deal nears completion

The US tech billionaire is full of praise for Australia’s buy now pay later provider, with its $39bn merger receiving a vital tick.

Square chief Jack Dorsey is full of praise for Afterpay. Picture: Jim Watson / AFP

Australian buy now, pay later darling Afterpay will provide US payment giant Square with some of its ‘ultimate superpowers’, chief executive Jack Dorsey says, as the $39bn mega merger of the two companies near completion.

Speaking a day after Square shareholders approved the Afterpay tie-up, Mr Dorsey – also the co-founder and chief executive of social media company Twitter – said that the combined company‘s access to both sellers and customers would be unparalleled.

“We have these incredible network effects in peer-to-peer, and now we need to look forward to being more of a commerce front end,” Mr Dorsey said on a conference call on Friday.

“Fortunately, we have another ecosystem at scale that focuses on sellers in omnichannel commerce, so it is easy for us to test a lot of these theories out and scale them up over time.

“We do believe that having both systems is our ultimate superpower and differentiator – having both ends of the counter, two different audiences, of sellers and individuals is really important.

“It is the secret behind Afterpay as well, and probably represents our largest potential.”

Amrita Ahuja, Square’s chief financial officer and a key architect of the Afterpay acquisition, touted the fact that Afterpay generates around one million leads per day to some of its enterprise merchants.

The buy now, pay later company was started as a side business for Australian co-founder Nick Molnar, who used to sell jewellery on eBay. The company now has about 3.6 million active customers globally.

“When you think about beyond just the payment type that BNPL enables, really the strategic imperative here for us is the commerce enablement that the integration of Afterpay enables for us, with both the Cash app and with our seller ecosystem,” Ms Ahuja said.

“Of course there will be opportunities to think about some cost savings over time but the strategic focus is on commerce and app discovery for us.”

Afterpay on Friday lodged its scheme booklet with regulator ASIC, with the Square transaction receiving a vital tick, with an independent expert labelling the deal fair and reasonable and in the best interests of Afterpay shareholders in the absence of a superior proposal.

The merger, if approved, would be the largest in Australian corporate history.

It was also revealed on Friday that the corporate watchdog ACCC does not intend to review the merger.

Afterpay shareholders will vote on the proposed deal on December 6.

“The Square Board and management are excited to offer you the opportunity to participate in the combination of Square and Afterpay, which will unite two companies aligned in a shared mission of economic empowerment and financial inclusion,” Mr Dorsey said in a letter to Afterpay shareholders.

Afterpay co-founder Nick Molnar

“We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles. Together, we can better connect Square’s largest ecosystems – Cash App and Seller – to deliver even more compelling products and services for merchants and consumers and ultimately better serve our customers around the world.”

Afterpay chair Elana Rubin, who is also a director of Telstra and Slater and Gordon, said the Square merger would help turbocharge Afterpay’s global growth.

“For Afterpay, the combination will enable Afterpay to further accelerate its growth in the US and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to its merchants and customers,” Ms Rubin said in the letter.

“For Square, Afterpay will help accelerate the strategic priorities for its Seller and Cash App ecosystems supported by shifting customer preferences away from traditional credit, especially among younger customers. It will also help Square meet the consistent demand from merchants for new ways to grow their sales, and further support the global growth in omnichannel commerce.”

Afterpay shares are down 3 per cent to $120.47 at noon AEDT, following Square’s disappointing financial results which saw it report quarterly revenue of $US3.84 versus analysts’ expectations of $US4.51, according to Bloomberg.