By P.R. Venkat

PayPal Holdings Inc. has agreed to acquire a Japanese payments company for approximately $2.7 billion, as the digital payment giant seeks to expand its business in the world's third-largest e-commerce market.

PayPal will acquire Paidy, a payments platform and provider of buy now, pay later solutions, primarily in cash, according to a statement late Tuesday.

The acquisition is expected to close in the fourth quarter and should have a minimal dilution to non-GAAP earnings per share in 2022, PayPal said.

Paidy's services allow Japanese shoppers to make purchases online and then pay for them each month in a consolidated bill at a convenience store or via bank transfer.

"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," said Riku Sugie, president and chief executive of Paidy.

After the acquisition, Paidy will continue to operate its existing business.

PayPal, which has more than 400 million consumers and merchants in over 200 markets, has long helped businesses big and small to take online and mobile payments, and has been using the pandemic's shift toward contactless payments to push into big chain stores via QR codes.

BofA Securities was the financial adviser to PayPal, while Goldman Sachs advised Paidy on the deal.

Write to P.R. Venkat at venkat.pr@wsj.com

(END) Dow Jones Newswires

09-07-21 2243ET