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PayPal Holdings Inc. (PYPL) on Wednesday announced a multi-year deal with Blue Owl Capital Inc. (OWL) to sell nearly $7 billion of its buy now, pay later (BNPL) receivables originated in the U.S.
According to the company’s announcement, funds managed by Blue Owl will purchase these BNPL receivables as part of a two-year agreement. PayPal stated it will continue to be responsible for all customer-facing activities, including underwriting and servicing, associated with its U.S. Pay in four BNPL products.
PayPal shares were up 1% in Wednesday’s pre-market trading, while Blue Owl’s shares were up more than 2%. Retail sentiment around PayPal was in the ‘extremely bullish’ territory, while it was ‘neutral’ for Blue Owl.
“This transaction reflects our disciplined approach to capital allocation. Partnering with Blue Owl helps support the growth of our Pay Later portfolio and gives us greater ability to invest in our strategic initiatives and innovation,” said Jamie Miller, Chief Financial & Operating Officer of PayPal.
PayPal clarified that the transaction has already been considered in the company’s third-quarter and full-year 2025 guidance for earnings per share (EPS). It launched BNPL services in 2020, while consumer financing has been a part of its portfolio since 2008. PayPal stated that it processed $33 billion of BNPL payment volume globally, representing an approximately 21% increase from 2023.
The company stated that customers who use BNPL services have an average order value that is 80% higher than that of a standard transaction. PayPal’s “Pay in 4” offers consumers the ability to pay for eligible purchases over four interest-free payments in six weeks.
PYPL stock is down 21% year-to-date, while OWL stock is down 20%.
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