Shaun Ler: So this could potentially be Australia's largest M&A deal ever. On Monday, both Afterpay and Square has entered into an arrangement whereby Square will acquire Afterpay via Scheme of Arrangement and via an all-script deal. What this means is that if this transaction is successful, every Afterpay shareholder would be entitled to receive about 0.375 shares of Square.

For Afterpay here there are two implications. So, firstly this significantly increases the appeal of Afterpay's products, if you think about what's going to happen Afterpay's active customers can now access various attractive features in the Square's Cash App, such as stock trading, such as peer to peer lending, albeit contrary. Furthermore, Afterpay merchants can also access Square's extensive customer base and sell to them as well. And I think this is also a very attractive deal for Afterpay. Because as the buy now, pay later space gets more competitive, and we get more well-resourced and richer incumbents entering the space. This speaks to the potential for higher capital investments in the future, at which Afterpay might not be able to support and would have to do so via equity raisings. I think being acquired by Square really provides it with a strong financial backing to support its growth.

I mean, if we think about what's happened in 2020, PayPal one of Afterpay's biggest buy now competitor has spent 36 times more than Afterpay, roughly in sales and marketing. So this really speaks to the significant financial strain that (indiscernible) Afterpay if it were to grow alone. So all in it makes the Afterpay product more attractive, it expands its user base, and it provides Afterpay with the much needed firepower for growth.

This could bring forward many other discussions, pertaining consolidations, pertaining mergers. Either that or firms need to think how to really differentiate themselves, because if we think about how, buy now, pay later, players have attempted to differentiate themselves historically, it's mainly based on number one, creating more marketing, for their merchants or number two, providing better discounts, providing more cash back deals. Now if you take a step back and think about this properly, there's technically nothing stopping the richer incumbent from entering this space and winning market share. And therefore, in my opinion, many other smaller players with a less differentiated product or with a more simple product could find themselves in a more difficult situation to compete moving forward.

And I think, you know, previously we were of the view that it could be about 12 to 18 months more moving forward, before the wave of M&A and consolidation happens. I think, what this deal really means is we could bring forward some of those discussions and we could see buy now, pay later firms which are more alike, perhaps consolidate with each other perhaps, then to get early shot in order to stay competitive.

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