PayPal Expands Buy Now Pay Later: Can it Fuel Growth in 2025?

Core Insights - PayPal has launched "Pay in 4," a no-fee buy now, pay later (BNPL) solution for Canadian consumers, allowing them to split purchases between $30 and $1,500 into four equal, interest-free payments over six weeks [1][8] - The BNPL segment is experiencing significant growth, with PayPal's total payment volume (TPV) projected to approach $20 billion in 2025, reflecting over 20% year-over-year growth in Q3 2025 [2][8] - Strategic initiatives include a partnership with Blue Owl Capital to purchase approximately $7 billion of PayPal's "Pay in 4" loans and a 5% cashback offer for U.S. customers on BNPL purchases [3][8] Company Developments - PayPal's BNPL solution is expanding geographically, now available in Canada, with extended payment terms in Italy and Spain allowing up to 24 installments [4] - The company has seen a decline in share price, down 21.5% year to date, underperforming the broader industry and the S&P 500 Index [7] Financial Performance - PayPal's shares are currently trading at a forward 12-month P/E of 11.44X, significantly lower than the industry average of 20.65X, indicating a potentially undervalued stock [10] - The Zacks Consensus Estimate for PayPal's full-year 2025 EPS has been revised upward, suggesting a year-over-year growth of 14.6% [11]