Core Insights - PayPal Holdings Inc. has entered a two-year agreement with Blue Owl Capital to sell approximately $7 billion of Buy Now, Pay Later (BNPL) receivables originated in the US [1][3] - This transaction supports PayPal's balance sheet-light model for credit while allowing the company to maintain full responsibility for customer-facing activities related to its US Pay in 4 BNPL products [2][3] - The financial implications of this deal have already been incorporated into PayPal's Q3 and full-year 2025 guidance for both GAAP and adjusted EPS, as well as adjusted transaction margin dollars [2] Company Overview - PayPal Holdings Inc. operates as a technology platform facilitating digital payments for merchants and consumers globally [4] - Blue Owl Capital Inc. is an alternative asset manager in the US, providing solutions through permanent capital vehicles and long-dated private funds [4] Industry Context - Online consumer financing has been a strategic focus for PayPal since 2008, with the introduction of the Pay in 4 product in 2020, which allows consumers to split eligible purchases into four interest-free payments over six weeks [3] - The BNPL service has shown to drive higher sales for merchants, with consumers opting for BNPL spending over 80% more per transaction compared to standard branded checkout [3]

PayPal is taking a notable step forward in the realm of consumer financing with its recent partnership with Blue Owl Capital, a move that could significantly benefit small business owners across the United States. Announced on September 24, 2025, this two-year agreement empowers Blue Owl-managed funds to purchase approximately $7 billion of PayPal’s “Pay in 4” buy now, pay later (BNPL) loans. This collaboration aims to enhance the flexibility and accessibility of payment options for consumers, ultimately im ...

PayPal Holdings, Inc. (NASDAQ: PYPL) is focused on enhancing digital payments and financial services in Asia and across Europe.From forging a credit partnership to supporting growth in emerging markets and backing European fintechs, recent updates underscore PayPal’s commitment to enabling more inclusive digital financial services.With the digital economy growing—global e-commerce sales projected to hit $8 trillion by 2027—these updates position PayPal as a payments enabler.Recently, PayPal entered a multi- ...

Core Insights - PayPal's Buy Now, Pay Later (BNPL) feature is a significant growth driver, with BNPL volume increasing over 20% year over year in Q2 2025 and monthly active accounts growing by 18% [1][8] Group 1: BNPL Growth and Partnerships - PayPal has entered a two-year agreement with Blue Owl Capital to sell approximately $7 billion of its U.S. "Pay in 4" BNPL receivables, while continuing to manage customer interactions [2] - The BNPL solution has proven beneficial for merchants, exemplified by Ace Hardware, which saw a 35% increase in PayPal sales and a sevenfold rise in average order values after adopting the BNPL service [3] - PayPal's BNPL is widely available, operating in nine global markets, with plans for further expansion in 2025 [4] Group 2: Economic Impact and Competitive Landscape - Consumers using BNPL have an average order value over 80% higher than standard branded checkouts, enhancing merchant sales and creating additional revenue opportunities [4] - In comparison, Block's BNPL Gross Merchandise Value (GMV) grew 17% year over year to $9.11 billion in Q2 2025, while Affirm reported a 45.6% increase in total transactions to 31.3 million in Q3 2025 [5][6] Group 3: Financial Performance and Valuation - PayPal shares have declined 20.5% year to date, underperforming the broader industry and the S&P 500 Index [7] - The stock is trading at a forward 12-month P/E of 12.02X, significantly lower than the industry average of 21.13X, indicating a potential undervaluation [9] - The Zacks Consensus Estimate for PayPal's full-year 2025 EPS has been revised upward, suggesting a year-over-year growth of 12.5% [10]

PayPal and BNPL Loans - PayPal has entered into an agreement with Blue Owl Capital to sell approximately $7 billion worth of its Pay in 4 buy now/pay later (BNPL) loans originated in the U.S. over the next year, while continuing to originate and service the loans [1] - The Pay in 4 service, launched in 2020, allows customers to split purchases into four interest-free payments over six weeks, with PayPal processing over $33 billion in BNPL payment volume in 2024, marking a 21% year-over-year increase [2] - PayPal has a similar loan purchase agreement with KKR for up to 40 billion euros of its European BNPL loans, indicating a strategic move to enhance its capital allocation and support the growth of its Pay Later portfolio [4] Market Trends and Competitors - There is a growing interest among asset managers and investment firms for short-duration BNPL loans, with Klarna and Affirm also engaging in significant loan purchase agreements with various investment firms [3] - Analysts suggest that while the agreement with Blue Owl is strategically beneficial for PayPal, the immediate impact may be minimal as the actual outstanding receivables for Pay-in-4 loans in the U.S. are likely a fraction of the $7 billion agreement [5]

PayPal formed a two-year, multibillion-dollar pact with asset manager Blue Owl Capital.By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.Under the partnership, funds managed by Blue Owl will purchase roughly $7 billi ...

PayPal (PYPL) has had a tough run in 2025, with its stock sinking more than 20% year-to-date, underperforming the broader market. The combination of rising competition in the fintech space and macroeconomic uncertainty has pressured its shares. However, recent developments suggest that the company may be setting the stage for a significant recovery. PayPal’s Blue Owl Deal A key development is PayPal’s new partnership with Blue Owl Capital, a prominent alternative asset manager, which will help PYPL to li ...

Group 1 - PayPal and Blue Owl Capital have entered a two-year agreement for Blue Owl to purchase approximately $7 billion of PayPal's buy now, pay later (BNPL) receivables in the U.S. [1] - PayPal has been offering BNPL services since 2008, with the Pay in 4 product launched in 2020, allowing consumers to split purchases into four interest-free payments over six weeks [2][3] - In 2024, PayPal processed over $33 billion in BNPL payment volume globally, representing a 21% increase from 2023 [4] Group 2 - The BNPL service enhances sales for merchants and integrates well within the PayPal ecosystem, often at lower costs compared to standalone BNPL providers [4] - PayPal's Chief Financial & Operating Officer stated that the agreement aligns with the company's balance sheet-light model for credit [5] - The deal is reflected in PayPal's third-quarter and full-year 2025 guidance for earnings per share and transaction margin dollars [6] Group 3 - PayPal plans to invest $100 million in the Middle East and Africa to foster innovation and support entrepreneurs, aiming to promote inclusive economic growth [6][7] - The investment will be executed through minority stakes, acquisitions, and funding from PayPal Ventures, focusing on scaling local businesses and expanding digital economy access [7] - This initiative follows the launch of PayPal's first regional hub in Dubai, aimed at providing seamless payments and expanded market access [8]

Core Insights - PayPal and Blue Owl Capital have entered into a two-year agreement for Blue Owl to purchase approximately $7 billion of PayPal's "Pay in 4" loans originated in the U.S. [1] - PayPal's "Pay in 4" product allows consumers to split eligible purchases into four interest-free payments over six weeks, enhancing its BNPL offerings [2] - In 2024, PayPal processed over $33 billion in BNPL payment volume globally, reflecting a 21% increase from 2023 [3] Company Strategy - The partnership with Blue Owl is aligned with PayPal's balance sheet-light model for credit and supports the growth of its Pay Later portfolio [4] - PayPal's scale and consumer relationships enable informed credit decisions, enhancing the quality of its BNPL offerings [4] Market Position - PayPal's BNPL solutions are widely available, making it one of the most broadly distributed options in its largest markets [2] - Merchants using PayPal's BNPL can offer flexible payment options that drive higher sales, with average order values over 80% higher than standard transactions [3]

Core Insights - Klarna Group's recent IPO on the NYSE was highly successful, pricing at $40 per share and debuting with a 30% premium at $52, indicating strong demand in the digital payments sector [1] - The company's long-term growth narrative is supported by a 38% year-over-year revenue increase in the U.S. and a 19% increase in Gross Merchandise Volume (GMV) to $31.2 billion [2][3] - Klarna's strategic partnerships with major retailers enhance its brand presence and create a network effect, contributing to a 31% increase in active consumers to 111 million and a 34% expansion in its merchant network to 790,000 partners [3] Financial Performance - Klarna achieved five consecutive quarters of positive adjusted operating profit, reaching $29 million in Q2 2025, indicating a sound core business model [6] - Despite a net loss of $53 million for the quarter, this was primarily due to growth-related expenses, including a $24 million one-time charge for lease restructuring and $26 million in non-cash compensation [7] - Revenue grew by 20% in Q2 while adjusted operating expenses only rose by 3%, demonstrating effective operational efficiency and a strong average revenue per employee of $1 million [8] Risk Management and Credit Quality - Klarna has maintained disciplined underwriting standards, with a delinquency rate on its core Pay in 4 product falling to 0.89%, reflecting effective risk management [9] Future Outlook - Klarna's market debut validates its business strategy, with a strong growth trajectory in the U.S. and a technology-driven approach for achieving profitable scale [10] - The company has evolved from a buy-now, pay-later service into a comprehensive financial technology ecosystem, positioning itself for future growth [11]