The payments company disclosed that it was selling loans generated in France, Spain, Germany, the United Kingdom, and Italy to investment firm KKR.
KKR will also purchase future originations of BNPL loans that match the requirements. PayPal will continue to oversee all customer-facing operations for its BNPL product in Europe.
“Buy now, pay later,” said Gabrielle Rabinovitch, acting chief financial officer of PayPal, “has become a major asset to PayPal’s checkout experience, driving engagement, payment volume growth, and repeat use while delivering high-value customers to our merchants.”
In Europe, she continued, the partnership will enable PayPal to advance its BNPL businesses “alongside market demand while preserving free cash flow for other strategic initiatives.”
Recent financial results from PayPal and other businesses that offer BNPL services demonstrate this need, as was mentioned last month.
PayPal itself indicated that BNPL volumes increased by 70% from the previous year to $6 billion. Block said that its BNPL offering brought in $5.6 billion in first-quarter volumes, an 18% year-over-year growth. The year over year growth rate for Affirm was similarly 18%.
In the meanwhile, PayPal management emphasised that customers who use its BNPL service spend 30% more on branded checkout and that over 90% of them are already PayPal clients.