Wonga, the much-criticised payday loan provider, is branching out into payments with the acquisition of Germany's BillPay for an undisclosed sum.
The move will pit Wonga directly against PayPal, the eBay-owned giant of online payments. It will also provide the company with an alternative business should the UK loans market be reined in by future regulation.
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"The acquisition significantly accelerates our development into a broad-based, digital finance group and will also speed the development of our PayLater online retail product, together with the company's international expansion," claimed the company in a statement.
It continued: "The combined Wonga and BillPay business will consolidate our position as a pioneer in the financial revolution, offering customers a range of bold new payment and credit solutions for the modern world.
"As well as giving Wonga Group a presence in Europe's 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."
Wonga was founded in 2006 and is backed by venture capital investors as diverse as Balderton, Accel, Greylock, Meritech, Dawn Capital and Oak Investment Partners. It now makes £1.2m per week in profit.
Wonga has already been diversifying from its core payday loans business into more mainstream credit with its PayLater option on e-tail websites, leveraging its infrastructure to offer payment by instalments on goods.
Berlin-based BillPay was founded in 2009 and has two million users and operates predominantly in German-speaking countries in Europe - Germany, Austria and Switzerland - expanding recently into the Netherlands. It has some 3,500 sites partners and will almost certainly be rolled out in the UK as a result of the Wonga acquisition.
"Nelson Holzner, the founder and CEO of BillPay, and the officers remain after the takeover to exercise their current roles within the company," said BillPay in a statement.
