Swedish e-commerce payments firm Klarna is buying German payments player BillPay from UK payday lender Wonga.
The price of the deal is reportedly around the £60m mark.
The acquisition will see Klarna consolidate its position in the German market where it previously snapped up the team behind peer-to-peer payments app Cookies and rival payments startup Sofort.
The deal also highlights Wonga’s withdrawal from the payments space, having acquired BillPay in 2013, as it looks to cut costs as part of a turnaround.
The London-based lender has attracted negative press in the past for the predatory nature of its high-interest, short-term loans.
It posted a loss of more than £80m for 2015, more than double that of 2014, after it was forced to pay more than £15.4m in compensation to 45,000 customers by the FCA over its poor lending practices.
Founded by berlin startup builder Rocket Internet in 2009, BillPay is reportedly profitable and will add 12 million customers and 5,000 online shops to Klarna’s German operation.
BillPay also operates in Austria, Switzerland and the Netherlands.
Having raised more than $290m from investors Klarna already counts more than 45 million users across Europe and North America and is valued at $2.5bn.
Klarna CEO and co-founder Sebastian Siemiatkowski said: “We are excited to be working with BillPay and their talented team in Berlin.
“By combining our skills and expertise, and leveraging BillPay’s deep market knowledge, product features and consumer offering, we are confident that we can offer even more innovative payment services to our customers.
“Germany is one of the largest e-commerce markets in the world, and we are delighted to have strengthened our position here with this acquisition.”
The acquisition is still subject to approval by Germany’s financial supervisory authority.
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