Paidy: A Japanese Fintech Unicorn

Paidy: A Japanese Fintech Unicorn
Case Code: LDEN186
Case Length: 9 Pages
Period: 2004-2021
Pub Date: 2022
Teaching Note: Available
Price: Rs.400
Organization : Paidy
Industry :Financial Services
Countries : Japan
Themes: FinTech, Platform Ecosystem, Business Models,Product, Service Value
Paidy: A Japanese Fintech Unicorn
Abstract Case Intro 1 Case Intro 2 Excerpts


The case describes how Paidy, a Japanese FinTech company, pioneered buy now, pay later (BNPL) solutions tailored to the expectations of the Japanese market, leading to the start-up making quick inroads into a cash dominated country. It describes the financial payments and BNPL market in Japan and then focuses on the business model of Paidy. The case then touches upon how Paidy focused on offering various products and services targeted at the millennial segment in Japan.

The case also describes how Paidy sought to increase customer adoption by enhancing the customer experience in the digital payments space. This was possible due to a series of funding rounds led by investors like ITOCHU and SBI Holdings. Paidy used proprietary models and machine learning to underwrite transactions within seconds and guarantee payments to merchants. It increased revenue for merchants by reducing the number of incomplete transactions, increasing conversion rates, boosting average order values, and facilitating repeat purchases from consumers. The company also launched a zero-interest payment service in 2020 and introduced a monthly payment installment service branded “3-Pay” that enabled shoppers to make purchases online and then pay for them each month in a consolidated bill at a convenience store or via bank transfer. These efforts led to rapid growth and within six years the start-up became the leading cardless payment service, developing a sizable two-sided platform of consumers and merchants.

The case then touches upon the acquisition of Paidy by PayPal at a valuation of US$2.7 billion in 2021. After the acquisition, Paidy continued to operate its existing business and maintain the brand while its leaders, Paidy’s president and CEO Riku Sugie (Riku) and Russell, were expected to keep their positions. The case ends with the challenges that Paidy could face in its next phase of growth under PayPal with fierce competition in the BNPL market in Japan, and the market size being much smaller than that of Europe. Also, there was the possibility of more stringent measures or regulations in the future, which could potentially impact the growth of the payments industry.


The case is structured to achieve the following teaching objectives:

  • Understand the digital payments market in Japan.
  • Learn about the importance of offering enhanced digital payment experiences for faster consumer adoption.
  • Understand how Regulatory Technology (RegTech) enhances supervision and reduces compliance-related costs in financial services.
  • Examine the buy now, pay later (BNPL) business model.
  • The importance of acquisition as an indicator of success for a start-up.



FinTech; Digital Payments; Financial Services; Regulatory Environment; Entrepreneurship; Idea generation; Building the business; Customer Acquisition; Consumer Adoption; Platform Business; Business Model

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