More on PYPL losses on BNPY compared to Top 5
In 2025, PayPal’s renewed agreement with KKR authorizes the sale of up to €65 billion (about $75.4 billion USD) in BNPL loan receivables originated in major European markets through March 2028, with a replenishing loan commitment of up to €6 billion at any given time. This marks one of the largest off-balance-sheet management moves among BNPL lenders, allowing PayPal to transfer nearly all credit risk and capital needs for this substantial portfolio to KKR. These values represent the notional amount of receivables transferred; actual charge-offs (the "losses" ultimately absorbed by investors, including KKR) are not explicitly disclosed by PayPal or KKR, but this transfer structure is considered an industry-leading risk management move for a payment processor.?
Comparison to Other Top BNPL Providers- PayPal: Up to $75.4 billion in receivables managed through KKR; loss data not reported separately but managed largely off PayPal's balance sheet post-sale.
- Mastercard (Installments), Block, Inc. (Cash App/Afterpay), Klarna, and Affirm: These firms either retain receivables or securitize portions through capital markets, but none reported a single partner transaction of this magnitude. Loss rates vary:
- Industry averages for BNPL losses ("net charge-offs") range from 3% to 6% of receivables annually.
- Klarna and Affirm, for example, have reported net charge-off rates of 4–7% for 2024–2025, with outstanding BNPL loan books usually in the $3–15 billion range, much smaller than the notional receivables serviced by PayPal/KKR.?
- Mastercard, as a network/provider, does not assume receivable risk directly and is not comparable on credit loss management.
Table: 2025 BNPL Receivable Transfers/Loss Management
This means PayPal is offloading a notional BNPL volume unmatched by peers, and while specific net "losses sold" are not disclosed, its model keeps risk transfer at scale well above any other BNPL provider in 2025
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Not sure off loading BNPL by PYPL is the best strategy
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