Afterpay is expanding its business in Europe with the acquisition of Pagantis, a buy now pay later and credit provider that operates in Spain, France and Italy.

Afterpay announced yesterday that its subsidiary Clearpay Europe Ltd has entered into a share purchase agreement with NBQ Corporate SLU to acquire 100 per cent of Pagantis SAU and a related business PMT Technology SLU.

Pagantis is supervised by the Bank of Spain and holds a payment institution licence, which Afterpay said is eligible for “passporting” to other European Union markets.

The company said in a statement that it has identified the EU as the next location for its international expansion, “given its large millennial population, large fashion and beauty retail markets and significant debt card usage.”

“The buy now pay later sector is nascent or non-existent in many EU countries, representing an opportunity to capitalise on first/early mover advantage,” it said.

According to the company’s December half year financial report, US$135.1 million of its $220.3 million of revenue for the period was generated in Australia, $56.6 million in the United States and $20.4 million in other markets.

The Pagantis business will be rebranded Clearpay and provide a platform for the rollout of Clearpay across the EU in 2021.

The existing Pagantis consumer instalment and credit offerings will be discontinued and the existing book retained by NBQ.

Afterpay will pay €50 million, with €5 million payable upfront and the balance over three years.

Afterpay claims that its active customer numbers reached 9.9 million in the year to June – more than double the previous financial year.