Square is planning to acquire buy now, pay later (BNPL) firm Afterpay Ltd for $29 billion, and boom the instalment loan market.

“Square and Afterpay have a common purpose. We are building our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand followed with those principles,” said Square’s CEO Dorsey in a statement. “Together, we can properly connect our ecosystems to deliver even more compelling products and services for merchants and consumers,” he added.

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Shares of Afterpay in Australia increased more than 23 per cent. Square already offers instalment loans, which it said is a “powerful growth tool” for its main seller business. It intends to combine Afterpay into both its seller and Cash App ecosystems. Afterpay allows customers to pay in 4 interest-free instalments and pay a fee if they miss an automated payment. Its 16 million customers will be able to pay instalments directly through Cash App. The deal is expected to close in the year 2022.