Wonga, a London-based provider of short-term loans, has purchased BillPay, a Berlin-based online payment and financing platform.
Wonga plans to use BillPay to accelerate its development of financial services, such as its PayLater online retail product, which offers installment payments.
Wonga will also leverage the acquisition to expand into new markets. Wonga charges 1% per day for loans that typically have a term of about 17 days. The company says it is not a payday lendera business model thats facing criticism in the U.S.because Wongas loans arent tied to the borrowers salary and because it limits the number of times it approves extensions of the loan term.
BillPay provides e-commerce payment and financing products in continental Europe, primarily in Germany, Austria and Switzerland. It recently expanded into the Netherlands. BillPay has about 2 million users and 3,500 online stores. Its merchant clients include CBR Group, Runnerspoint, Fahrrad de, DriveNow and Home 24.
The combination of Wonga and BillPay follows the recent launch of Wongas consumer loan service in Poland, and the introduction of an online, short-term consumer credit business in Spain.
As well as giving Wonga Group a presence in Europes second-largest online retail market, this deal continues our ongoing transformation into a fully international, digital finance business with operations across three continents and more than three million customers, says Errol Damelin, Wongas founder and chief executive, in an Oct. 18 blog post.