PayPal Sells $7 Billion in BNPL Loans to Blue Owl Capital
PayPal formed a two-year, multibillion-dollar pact with asset manager Blue Owl Capital.
Under the partnership, funds managed by Blue Owl will purchase roughly $7 billion in loans from PayPal’s “Pay in 4” buy now, pay later (BNPL) program, the payments giant said in a Wednesday (Sept. 24) press release.
PayPal will remain responsible for all customer-facing activities, such as underwriting and servicing, associated with its Pay in 4 products, per the release.
“Online consumer financing has been a strategic offering of PayPal since 2008, and in 2020, the company launched its Pay in 4 product,” the release said. “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.”
PayPal processed more than $33 billion of BNPL payment volume worldwide last year, a roughly 21% increase from 2023, according to the release.
PayPal CEO Alex Chriss said during an earnings call in July that average order values using BNPL run “more than 80% higher” than a standard branded checkout transaction, a figure the company is using to recruit merchants who already accept PayPal but haven’t yet offered its installment options early in the shopping journey.
“This is another great step forward for PayPal and in line with our balance-sheet light model for credit,” PayPal Chief Financial Officer and Chief Operating Officer Jamie Miller said in the release. “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.”
Meanwhile, the PYMNTS Intelligence report “Split Shift: How Card Installments Are Reshaping the Pay Later Landscape” found that while BNPL adoption continues to expand, faster growth is occurring inside card networks.
“Store-branded cards, once dismissed as relics of department store shopping, are drawing in middle-income households and young consumers like Generation Z, while general-purpose card issuers are pushing installment conversions to hold onto high-value customers,” PYMNTS wrote Sept. 10. “That trend raises a question. In the new predictable-payment economy, will credit cards stop being revolving debt products and instead evolve into installment engines?”
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