PayPal to Boost Buy Now, Pay Later Services Amid Klarna IPO

PayPal CEO Alex Chriss sees buy now, pay later (BNPL) as a key growth driver, expecting it to emerge as a major growth driver for the company. PayPal processed $30 billion in BNPL transactions last year and plans to accelerate merchant adoption and communicate BNPL in its go-to-market messaging. Klarna is set to launch its IPO, while PayPal stock has retreated 21% in 2025.

PayPal CEO Alex Chriss has identified buy now, pay later (BNPL) as a critical growth driver for the company. In an effort to capitalize on this trend, PayPal processed $30 billion in BNPL transactions last year and plans to accelerate merchant adoption, integrating BNPL into its go-to-market messaging Caxton Associates LLP Acquires New Shares in PayPal Holdings, Inc. $PYPL^[1]. This strategic shift comes as PayPal's stock has retreated by 21% in 2025, indicating market uncertainty about the company's future growth prospects.

Chriss's focus on BNPL aligns with broader industry trends. Klarna, a prominent BNPL provider, is set to launch its IPO, further underscoring the potential of this market segment. PayPal's move to emphasize BNPL could position the company to capture a significant share of the growing BNPL market, which is expected to reach $680 billion by 2025 [2].

PayPal's recent earnings report, released on July 29, 2025, showed strong performance with earnings per share (EPS) of $1.40, beating estimates by $0.10. The company's revenue reached $8.29 billion, surpassing the consensus estimate of $8.08 billion. Despite these positive results, the stock's performance has been lackluster, highlighting the challenges faced by the company in the current market environment.

Institutional investors have shown continued interest in PayPal. Caxton Associates LLP bought a new position in PayPal shares in the first quarter, adding 300,401 shares valued at approximately $19,601,000 Caxton Associates LLP Acquires New Shares in PayPal Holdings, Inc. $PYPL^[1]. Other institutional investors, such as AQR Capital Management LLC, Allianz SE, and J. Goldman & Co LP, have also increased their stakes in the company. This strong institutional backing suggests confidence in PayPal's long-term prospects.

However, PayPal faces several risks, including competitive pressures and Asian fee margins. To mitigate these risks, the company has a $6 billion buyback program and high-margin services such as ads and crypto. These initiatives aim to buffer against headwinds and position PayPal as an undervalued fintech value play.

In conclusion, PayPal's strategic pivot towards BNPL, coupled with its strong financial performance, positions the company for potential growth. However, market uncertainty and competitive pressures will require careful navigation to fully capitalize on this opportunity.