More Rewards, More Flexibility: PayPal Introduces 5% Cash Back on Buy Now Pay Later Purchases this Holiday Season

Rhea-AI Summary

PayPal (NASDAQ: PYPL) announced on Oct. 6, 2025 a limited-time holiday rewards promotion: U.S. customers earn 5% cash back on eligible PayPal Buy Now Pay Later (BNPL) purchases from now through the end of the year, the PR states.

The company also said it is introducing Pay Monthly for in-store use in the U.S., with customers applying in the PayPal app, receiving a single-use virtual card that can be added to a mobile wallet and used within 24 hours. The PR cites consumer data: 60% of shoppers report increased holiday financial stress and >80% of BNPL users/considerers are open to using BNPL for holiday shopping.

Insights

Payments Strategy Analyst

PayPal rolls out 5% cash back on BNPL and in-store Pay Monthly through year-end; likely to drive use and checkout conversion.

What it means: The article states PayPal will offer 5% cash back on PayPal Buy Now Pay Later purchases in the U.S. through the end of the year and is expanding Pay Monthly for in-store use.

Why it matters: A time-limited cash-back incentive directly lowers effective cost for shoppers and can materially increase BNPL take-up and transaction frequency over the holiday window.

The rollout mechanism—saving the offer in the PayPal app and issuing single-use virtual cards for approved loans—supports rapid adoption and traceable attribution of spending to the BNPL product.

Retail Merchants Analyst

Merchants gain a holiday conversion tool as PayPal pairs BNPL flexibility with a 5% rebate; adoption may rise quickly.

What it means: The release highlights PayPal positioning BNPL as a tool to reduce cart abandonment and increase conversion by offering shoppers flexibility and a 5% cash back incentive.

Why it matters: For merchants, the article states BNPL is a proven method to attract shoppers and boost sales during peak season; expanding in-store Pay Monthly broadens where that demand can convert.

Monitor: the article notes in-store Pay Monthly will begin rolling out to U.S. customers over the coming weeks, which is the clear near-term implementation milestone to watch.

Customers have more ways to earn rewards when they pay over time for purchases in-store and online

SAN JOSE, Calif., Oct. 6, 2025 /PRNewswire/ -- PayPal today announced that U.S. customers will earn 5% cash back on PayPal Buy Now Pay Later (BNPL) purchases between now and the end of the year¹. As 60%² of shoppers feel more financial stress heading into this holiday season, PayPal, one of the leading BNPL providers worldwide, is helping to make it easier to manage spending this holiday season. With PayPal's BNPL offering, shoppers can split purchases into convenient payments and earn cash back, thus making their money go further during the holidays. PayPal is also introducing Pay Monthly³ in-store in the U.S., providing customers with more choice and flexibility to pay over time wherever they shop.

Whether shoppers are looking to buy gifts, fashion, electronics, or planning travel, PayPal's BNPL options now give them ways to earn rewards with convenience. Beginning today, shoppers can save the 5% cash back offer through the PayPal app and it will automatically apply to all eligible in-store and online PayPal BNPL transactions now until the end of the year.

"Our customers seek payment options that make holiday shopping easier and more rewarding," said Michelle Gill, General Manager, Small Business and Financial Services at PayPal. "With cash back on Buy Now Pay Later products, we're giving them a smarter way to pay and more flexibility to shop the way they want. And for merchants, PayPal BNPL is a proven way to attract more shoppers and increase conversion during the busiest season of the year."

Over 80% of consumers who have used or considered BNPL are open to using it for holiday shopping this year², making PayPal BNPL a critical opportunity for merchants looking to capture increased sales and increase conversion. PayPal's BNPL options help make it easy for merchants to boost sales and loyalty by giving shoppers flexible payment options and cash back incentives that reduce cart abandonment and build loyalty at checkout during this holiday season.

The expansion of PayPal Pay Monthly³ in-store provides shoppers access to the same flexibility, 5% cash back, and choice at checkout in store. Within the PayPal app, customers apply for their desired loan amount and once approved will be issued a single-use virtual card that can be added to their mobile wallet and used within 24 hours. PayPal makes it easy for customers to stay on top of spending with the ability to schedule automatic payments, track their loans and receive proactive reminders ahead of scheduled payments.

Pay Monthly for in-store use will begin rolling out to U.S. customers over the coming weeks. Merchants interested in adding PayPal's BNPL solutions ahead of the holiday season can learn more here.

About PayPal 
PayPal has been revolutionizing commerce globally for more than 25 years. Creating innovative experiences that make moving money, selling, and shopping simple, personalized, and secure, PayPal empowers consumers and businesses in approximately 200 markets to join and thrive in the global economy. For more information, visit https://www.paypal.com, https://about.pypl.com/ and https://investor.pypl.com/.

1. Expires 12/31. paypal.com/promoterms apply. Subject to approval. paypal.com/payin4 NMLS #910457
2. Talker research online Holiday 2025 Survey, commissioned by PayPal. 1,000 U.S. respondents., Sept. 2025.
3. Pay Monthly is subject to consumer credit approval and eligibility. Pay Monthly is currently not available to residents of AK, CT, HI or WA. The lender for Pay Monthly is WebBank. PayPal, Inc. (NMLS #910457): RI Loan Broker Licensee. VT Loan Solicitation Licensee.

Media Contact:
Gideon Anstey
gbanstey@paypal.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/more-rewards-more-flexibility-paypal-introduces-5-cash-back-on-buy-now-pay-later-purchases-this-holiday-season-302575120.html

SOURCE PayPal Holdings, Inc.

FAQ

What exactly did PayPal (PYPL) announce on Oct. 6, 2025 about BNPL rewards?

The PR states PayPal will offer 5% cash back on eligible U.S. PayPal BNPL purchases through the end of 2025.

How does PayPal's new Pay Monthly in-store rollout work for PYPL customers?

According to the PR, customers apply in the PayPal app, get a single-use virtual card to add to their mobile wallet, and can use it within 24 hours; rollout begins over the coming weeks.

Does the 5% cash back apply to both online and in-store PayPal BNPL purchases for PYPL?

Yes — the PR states the 5% cash back automatically applies to eligible in-store and online PayPal BNPL transactions during the promotion period.

When does the PayPal (PYPL) 5% BNPL cash back promotion end?

The PR specifies the offer runs from Oct. 6, 2025 through the end of the year.

Will the PayPal (PYPL) promotion require enrollment in the app?

Yes — the PR says shoppers can save the 5% cash back offer through the PayPal app and it will then apply automatically to eligible BNPL purchases.