- PayPal will continue managing all customer-facing activities, including underwriting and servicing.
- The deal expands on a 2023 BNPL arrangement between the two firms.
- PayPal said that the financial outcome from the agreement is already reflected in its fourth-quarter and full-year 2025 earnings forecasts.
PayPal (PYPL), on Monday, signed a loan agreement with investment firm KKR, under which KKR’s credit funds and accounts will purchase up to €65 billion ($75.4 billion) in PayPal’s European ‘buy now, pay later’ (BNPL) loan receivables across key markets, including France, Germany, Italy, Spain, and the United Kingdom.
The new deal, which includes a replenishing loan commitment of up to €6 billion, expands the June 2023 arrangement under which KKR’s credit funds and accounts started buying most of PayPal’s European BNPL receivables.
A replenishing loan commitment is a financing arrangement in which repaid funds can be borrowed again, keeping the credit limit going.
Despite transferring the receivables, PayPal will continue managing all customer-facing activities, including underwriting and servicing. KKR Capital Markets arranged the debt financing for the transaction.
“The enhanced terms of this new agreement will support the ongoing growth of our BNPL portfolio in Europe. It demonstrates our commitment to a balance-sheet light model for credit that helps preserve flexibility for strategic investments and capital return,” said Jamie Miller, Chief Financial and Operating Officer at PayPal.
PayPal said that the financial outcome from the agreement is already reflected in its fourth-quarter (Q4) and full-year 2025 earnings forecasts.
For Q4, the company expects GAAP earnings per share (EPS) of $1.23 – $1.27. For full-year 2025, PayPal expects GAAP EPS of $5.11 – $5.15, compared to an earlier estimate of $4.90 – $5.05.
What Is BNPL?
Buy Now, Pay Later (BNPL) is a payment method that lets shoppers buy items immediately and pay over time, often with no interest. According to a Deloitte report from July, the BNPL market is expected to reach about $560 billion by the end of 2025 and expand to nearly $912 billion by 2030.
Major economies like Germany, Spain, Italy, and France are projected to see an average BNPL growth of 12% to 13% in 2025 compared with 2024.
Stock Watch
Paypal shares were up 0.24% while KKR stock was down 2.2%.
Retail sentiment for PYPL on Stocktwits was in the ‘bearish’ zone over the last 24 hours, while it remained ‘neutral’ for KKR during the same time frame.
PYPL stock has declined around 26% so far this year.
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