PayPal Announces a Multi-Year Relationship for U.S. Buy Now, Pay Later Receivables with Funds Managed by Blue Owl Capital

Rhea-AI Summary

PayPal (NASDAQ: PYPL) has announced a significant two-year agreement with Blue Owl Capital, where Blue Owl managed funds will purchase approximately $7 billion of PayPal's U.S. "Pay in 4" BNPL receivables. PayPal will maintain control of customer-facing activities, including underwriting and servicing.

The company's BNPL solutions have shown strong performance, with global payment volume exceeding $33 billion in 2024, representing a 21% year-over-year increase. Consumer orders using BNPL average 80% higher value than standard transactions. This strategic move aligns with PayPal's balance sheet-light model for credit and is already included in the company's Q3 and full-year 2025 guidance.

Positive

• Agreement to sell $7 billion of BNPL receivables improves balance sheet efficiency
• BNPL payment volume grew 21% YoY to $33 billion in 2024
• BNPL transactions show 80% higher average order value compared to standard checkout
• Transaction maintains PayPal's control over customer relationships and underwriting

Negative

• Selling of receivables could impact direct revenue from BNPL interest and fees
• Continued exposure to servicing obligations and potential credit risks

Insights

Financial Analyst

PayPal's $7B BNPL receivables deal with Blue Owl strengthens balance sheet efficiency while maintaining growth in high-margin lending business.

PayPal's new arrangement with Blue Owl Capital represents a strategic shift toward capital efficiency in its rapidly growing buy now, pay later business. Under this agreement, Blue Owl managed funds will purchase approximately $7 billion of PayPal's "Pay in 4" loans originated in the U.S. over the next two years, while PayPal retains responsibility for customer-facing activities including underwriting and servicing.

This transaction exemplifies PayPal's "balance sheet-light model for credit" strategy, effectively freeing up capital that would otherwise be tied to these receivables. The company can now redeploy these resources toward strategic initiatives and innovation while still benefiting from the BNPL offering that has shown impressive growth – with global BNPL payment volume reaching $33 billion in 2024, up 21% year-over-year.

The deal structure is particularly noteworthy as it allows PayPal to maintain its customer relationships and underwriting control while transferring the receivables. This preserves the significant merchant benefits of their BNPL solution, which drives average order values 80% higher than standard checkout transactions – a critical competitive advantage in the payments ecosystem.

From a financial planning perspective, the fact that this transaction was already incorporated into the company's Q3 and full-year 2025 guidance indicates disciplined forward planning. By partnering with Blue Owl, a specialized alternative asset manager, PayPal gains financial flexibility while ensuring its high-growth BNPL business can continue scaling without creating balance sheet constraints or increased capital requirements.

Blue Owl managed funds to purchase approximately $7 billion of PayPal "Pay in 4" loans originated in the U.S. over the next two years

SAN JOSE, Calif., Sept. 24, 2025 /PRNewswire/ -- PayPal Holdings, Inc. (NASDAQ: PYPL) and Blue Owl Capital (NYSE: OWL), a leading alternative asset manager, today announced the execution of a two-year agreement under which funds managed by Blue Owl will purchase approximately $7 billion of buy now, pay later (BNPL) receivables originated by PayPal in the U.S. PayPal will remain responsible for all customer-facing activities, including underwriting and servicing, associated with its U.S. Pay in 4 BNPL products.

Online consumer financing has been a strategic offering of PayPal since 2008 and in 2020 the company launched its Pay in 4 product. PayPal's BNPL solutions are available nearly everywhere PayPal is accepted in its largest markets, making it one of the most broadly distributed BNPL solutions. Pay in 4 provides consumers with the choice to break up eligible purchases into 4 interest-free payments over 6 weeks.

For merchants, BNPL allows them to offer flexible payment options that drive higher sales, all seamlessly integrated within the PayPal ecosystem with no extra tech work, and often at a lower cost than with standalone BNPL providers. When consumers globally choose BNPL, their average order value is more than 80% higher than a standard branded checkout transaction. In 2024, PayPal processed more than $33 billion of BNPL payment volume globally, up approximately 21% from 2023.

"This is another great step forward for PayPal and in line with our balance sheet-light model for credit," said Jamie Miller, Chief Financial & Operating Officer of PayPal. "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." 

"PayPal's scale and deep relationships with its consumers allows it to make informed decisions when extending credit through Pay in 4," said Ivan Zinn, Head of Alternative Credit at Blue Owl. "We are thrilled to partner with a leader in the BNPL space to bring this high-quality asset to our portfolio."

The transaction is already contemplated in PayPal's third quarter and full year 2025 guidance for GAAP and non-GAAP earnings per share, and non-GAAP transaction margin dollars announced on July 29, 2025.

About Blue Owl
Blue Owl (NYSE: OWL) is a leading asset manager that is redefining alternatives^®.

With over $284 billion in assets under management as of June 30, 2025, we invest across three multi-strategy platforms: Credit, Real Assets and GP Strategic Capital. Anchored by a strong permanent capital base, we provide businesses with private capital solutions to drive long-term growth and offer institutional investors, individual investors, and insurance companies differentiated alternative investment opportunities that aim to deliver strong performance, risk-adjusted returns, and capital preservation.

Together with over 1,200 experienced professionals globally, Blue Owl brings the vision and discipline to create the exceptional. To learn more, visit www.blueowl.com

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://paypal.com, https://about.pypl.com, and https://investor.pypl.com/.

PayPal Investor Relations Contact
investorrelations@paypal.com

PayPal Media Relations Contact
mediarelations@paypal.com

Forward Looking Statements About PayPal

This announcement contains "forward-looking" statements within the meaning of applicable securities laws. Forward-looking statements and information relate to future events and future performance and reflect, among other things PayPal's expectations regarding the anticipated benefits of this transaction. Forward looking statements may be identified by words such as "may," "will," "would," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue," "strategy," "future," "opportunity," "plan," "project," "forecast," and other similar expressions. Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from the statements made, and, accordingly, readers should not place undue reliance on forward-looking statements and information. Factors that could cause or contribute to such differences include, but are not limited to, the failure to satisfy the conditions to the completion of the transaction and the acquisition of future originations, the future growth of PayPal's U.S. Pay in 4 BNPL product, and the possibility that operationalizing the transaction post-closing may be more difficult than expected.

More information about these and other factors that could adversely affect PayPal's results of operations, financial condition and prospects or that could cause actual results to differ materially from those expressed or implied in forward-looking statements can be found in PayPal Holdings, Inc.'s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (the "SEC"), and its future filings with the SEC. The forward-looking statements contained in this announcement speak only as of the date hereof. PayPal expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

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SOURCE PayPal Holdings, Inc.

FAQ

What is the value of PayPal's BNPL deal with Blue Owl Capital?

Blue Owl managed funds will purchase approximately $7 billion of PayPal's U.S. 'Pay in 4' BNPL receivables over a two-year period.

How much did PayPal's BNPL payment volume grow in 2024?

PayPal processed $33 billion in BNPL payment volume globally in 2024, representing a 21% increase from 2023.

What is the impact of BNPL on PayPal's average order value?

When consumers use BNPL, their average order value is more than 80% higher than a standard branded checkout transaction.

Will PayPal continue to manage its BNPL customer relationships after the Blue Owl deal?

Yes, PayPal will remain responsible for all customer-facing activities, including underwriting and servicing, associated with its U.S. Pay in 4 BNPL products.

How will the Blue Owl deal affect PayPal's 2025 financial guidance?

The transaction is already included in PayPal's Q3 and full year 2025 guidance for GAAP and non-GAAP earnings per share, and non-GAAP transaction margin dollars.