If you think about the times before the credit card, there were only two ways to pay for something – installment or cash. Cash has always been about pay cash, receive right away, the other method was to give the shopkeeper money on a weekly basis (your pay day) and when you paid the installment you could pick up the item to enjoy. Then came the introduction of credit cards – first was diner’s club which became American Express and then the two general cards of Mastercard and VISA, took over from chain store credit cards. While you could enjoy many more things using a credit card, the downside was a monthly payment or after 30 days higher interest charges. to avoid the credit card high interest rate charges, people use their line of credits and pay a lower interest rate. During the installment method, there was plenty of bookkeeping to do and for a few clients it was okay to do, but imagine if there were thousands or millions. Technology has come to the installment plans and offers a choice to higher interest charges of credit cards. (if you are an investor – Mastercard and VISA have wonderful returns because there are many people who pay high interest charges).

In an article by Sayantani Ghosh and Tim Kelly of Reuters, PayPal Holdings is buying the Japanese “buy now, pay later” (BNPL) firm Paidy for $2.7 billion.

The deal follows Square buying the Australian firm Afterpay Ltd. for $29 billion which made the founders billions.

Paidy has more than 6 million registed users and allows Japanese consumers to purchase online and then pay for each month at a convience store or by bank transfer.

Paidy’s backers included Soros Capital Management, VISA and Itochu Corp. Founder and Chairman Russell Cummer and CEO Riku Sugie will continue working for Paidy.

PayPal has grown during the COVID pandemic to more than 400 million active accounts as people buy online and continue to do so.

Linking to dividend paying stocks, both VISA and Mastercard pay dividends and both stocks have increased in price over the past couple of years. When business changes as COVID as changed many industries some industries naturally benefit and others do not. The credit card companies benefited from greater on line shopping, however their bread and butter is hospitality and tourism where people tend to use credit cards to a greater extend. Mastercard and VISA owned the wires which money flows so they will benefit from moves to a cashless society, however it does take a little time. Some companies can pivot or change direction to where their revenues can continue to flow and when they do, it seems little has changed as we all changed with the company, if that happens you can continue to hold your shares.

There are more questions than answers, till the next time – to raising questions.