Exchange

About Exchange

Exchange Corporation (ExCo) operates as a Japanese financial technology entity, establishing its presence in the market in March 2008. The company was founded by Russell Cummer and Lee Smith. Initially, its core business was a social lending service known as "AQUSH".

The company's trajectory shifted significantly with the introduction of its "Buy Now, Pay Later" (BNPL) service, Paidy, in October 2014. This pivot proved successful, leading to a gradual move away from the social lending model. The recruitment for AQUSH was officially closed in June 2018 as the company intensified its focus on Paidy. This strategic realignment culminated in a major milestone on September 7, 2021, when PayPal Holdings Inc. announced its acquisition of the company for approximately $2.7 billion (300 billion yen), although Paidy continues to operate its existing business and maintain its brand. Following the acquisition, both Russell Cummer, as Executive Chairman, and CEO Riku Sugie were expected to remain in their leadership roles.

Paidy's business model is centered on providing a cardless deferred payment solution for e-commerce, addressing a specific need in the Japanese market where many consumers prefer not to use credit cards for online transactions. The service allows shoppers to make purchases using only their mobile phone number and email address, with no pre-registration required. Transactions from various merchants are consolidated into a single monthly bill, which users can settle the following month via bank transfer, convenience store payment, or automatic debit. Paidy's revenue is primarily generated from transaction fees charged to merchants for each purchase made through the platform. These fees are typically higher than standard credit card processing fees, as Paidy assumes the credit risk and manages customer payment support, which can lead to increased conversion rates for retailers. Additional revenue streams include late fees from consumers and fees for installment plans.

The Paidy platform uses proprietary technology and machine learning to underwrite transactions in seconds, guaranteeing payment to merchants and reducing issues like incomplete transactions. For consumers, Paidy offers features such as "3-Pay," an option to split payments into three interest-free monthly installments, and "Paidy Plus," which provides identity verification and higher spending limits. The service is integrated into over 700,000 online stores, including major platforms like Amazon and Apple.