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]