Mr Dorsey said both companies had a focus on empowering consumers.
“Square and Afterpay have a shared purpose,” he said.
“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.
“By integrating Afterpay in the seller and cash apps, we plan to combine complementary businesses, while also celebrating even stronger connections, and driving more commerce across both ecosystems.
“Increasingly, we’re seeing strong demand for buy now, pay later for both merchants and consumers and rapid adoption especially among younger consumers.
“This new financial service gives more control to individuals and merchants, and is one we want to make part of our combined ecosystem.
“It’s a simple idea, enabling customers to pay for purchases later, interest-free, without having to use traditional credit sources, while helping you drive more sales to the seller.”
Mr Molnar said he first got to know Mr Dorsey through his philanthropic activities, while Square chief financial officer Amrita Ahuja was an early contact after he moved to San Francisco.
“I’ve got to know Jack over the recent period and Amrita I met very early since moving here, and there’s been a huge admiration for the Square team from the Afterpay side,” he said.
“The ability for Square to have delivered such sustained growth and built the platform that it has is a testament to Jack and the entire leadership team at Square.
“In terms of a partner to take this to the next level and realise what the global buy now, pay later opportunity represents, that was critical in our decision making and I couldn’t be more proud.”
Mr Dorsey’s comments came as Afterpay investors continued to assess the deal that was announced on Monday.
Under the terms of the mega-merger Afterpay shareholders will receive 0.375 of Square’s New York listed shares for each Afterpay share that they own. Afterpay shareholders will own around 18.5 per cent of the merged company when the deal completes.
One of Australia’s best performing growth funds will continue to back the merged company assuming the takeover goes through.
Hyperion Asset Management deputy chief investment officer Jason Orthman said that while the 31 per cent premium offered by Square in its all scrip bid for Afterpay “does not excite” his fund, the structure of the deal to receive Square stock listed on the ASX as a CDI was “compelling”.
He said it was a “huge win” for Hyperion investors and “validates the market inefficiencies Hyperion continues to exploit as business analysts and long-term holders.
“In our view this transaction is an upgrade in liquidity, valuation and quality,” Mr Orthman said.
Ord Minnett said Square’s proposed Afterpay takeover had “clear implications” for the buy now, pay later sector.
The market has “firmly entered a period of strategic investment in the space”, and it’s another “significant validation” of the sector, while Citi’s Siraj Ahmed hasn’t ruled out a competing bid for Afterpay from other fintechs and e-commerce platforms, but said “the list of potential suitors is limited”.
Bell Potter’s Richard Coppleson described the mooted deal as a “win-win for Square and Afterpay.”
“Square shareholders can see this as a very good deal for them and both brands will be able to leverage off each other for supercharged growth going forward,” he said.
“What the Afterpay bears still don’t realise is that Afterpay is predominantly a digital marketing platform for retailers with a buy now, pay later model and not just BNPL like all the others.”
He noted that Afterpay drove about 1 million lead referrals “per day ” to its merchant partners last financial year, with about 55 per cent of referrals coming from consumers browsing the home page on the Afterpay mobile app, showing the power of its platform for merchants.
This article was originally published in The Australian.