Private equity firm PayPal buys loans

Private equity firm KKR is buying 40 billion euros of PayPal loans in Europe. Shares of the payments company rose on Tuesday as a result of the deal.

Private equity firm KKR is to buy up to 40 billion euros in buy-now, pay-later loans from PayPal, which will bring billions of dollars to PayPal — and its shares rose 1.7 percent on Tuesday after the deal became official. Reuters writes.

Buy now, pay later, which was so popular, has declined due to high inflation and interest rates – both of which have recently reduced consumer purchasing power.

New agreement between KKR and PayPal

With the new deal closed on Tuesday, KKR will buy up to 40 billion euros of credit receivables from PayPal in France, Germany, Italy, Spain and the UK, which is expected to bring in total proceeds of about $1.8 billion. and will close in the second half of the year,

Experts in the field are positive that PayPal is freeing up its credit risk from the uncertainty of buying now and paying later.

“We believe this deal removes some of the risk for PayPal,” he says Brett HornEquity analyst at Morningstar Research Services.

The segment has seen record growth

For Paypal, this segment is huge, touching 30 million global customers in the last three years. The joint buy-now, pay-later service is expected to grow by 160 percent in 2022 over the previous year. Last year, the company processed $20 billion in this segment.

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