The announcement made on August 1 revealed that the two companies have entered into a “Scheme Implementation Deed” under which Square will acquire all of the issued shares in Afterpay. The transaction will be paid entirely in stock and has an estimated value of $29 billion based on Friday’s closing price of Square stock.

Afterpay allows users to purchase a product online or in-store and then pay for it later in four instalments. Only one quarter of the price is paid upfront, with subsequent quarters being paid off every two weeks. The service is interest-free, as Afterpay’s profit comes from retailers that pay to appear on the service. Afterpay is just one of many buy-now-pay-later companies that have thrived during the coronavirus pandemic as more people have turned to online shopping. Research firm CB Insights expects the sector to grow between 10-15 times by 2025.

In a statement, Square founder and CEO Jack Dorsey said that Afterpay and Square have a shared purpose, with both businesses being built to make the financial system fairer, more accessible, and more inclusive. Dorsey says he believes the merging of the two companies will bring more compelling products and services to consumers and merchants alike.