The Weekly Wrap: all you need to know by Friday COB | June 23rd

By Puja Sharma

The Weekly Wrap is published every Friday and recaps the week’s main stories and deals, as well as upcoming events and announcements. For Prime subscribers only.

The Big Story

PayPal Holdings, and KKR, a leading global investment firm, this week announced the signing of an exclusive multi-year agreement for a €3 billion replenishing loan commitment under which private credit funds and accounts managed by KKR will purchase up to €40 billion of Buy Now, Pay Later (BNPL) loan receivables originated by PayPal in France, Germany, Italy, Spain, and the United Kingdom.

Under the terms of the agreement, KKR’s private credit funds and accounts will acquire substantially all the European BNPL loan portfolio held on PayPal’s balance sheet at the close of the transaction and will also acquire future originations of eligible BNPL loans. PayPal will remain responsible for all customer-facing activities, including underwriting and servicing, associated with its European BNPL products.

While the concept of split installment payments for consumer purchases has been around for decades and online consumer financing has been a strategic offering of PayPal since 2008, BNPL has dramatically increased in popularity over the past several years. Since launching its first BNPL offering in 2020, PayPal has become an industry leader with its PayPal Pay Later products, issuing more than 200 million loans to over 30 million customers in eight markets around the world. In 2022, PayPal processed more than $20 billion of BNPL payment volume globally, up approximately 160% from 2021.

“Buy now, pay later has become a major asset to PayPal’s checkout experience, driving engagement, payment volume growth, and repeat use while delivering high-value customers to our merchants,” said Gabrielle Rabinovitch, senior vice president, acting chief financial officer of PayPal. “Our collaboration with KKR will allow us to accelerate our PayPal Pay Later originations alongside market demand in Europe while preserving free cash flow for other strategic initiatives. This transaction is yet another example of our disciplined approach to capital allocation.”

KKR is funding the transaction through its private credit funds and accounts.

Deals of the week

• TransBnk secures $1m Seed Funding led by 8i Ventures
• CaixaBank and Iberpay launch Request to Pay in Europe
• Mastercard and One Global partner to launch Click to Pay in Kuwait
• Lloyds Banking Group to invest in new technology centre in India
• Volt raises $60m Series B round led by Silicon Valley investor IVP
• Skaleet partners with BIAN to drive Core Banking excellence
• DNV acquires cybersecurity firm Nixu in €98m deal
• ThetaRay and Millennium EBS to provide compliance solutions for financial institutions
• Cashfree Payments launches CVV-free payments for businesses
• QNB Group selects IBM to revamp its digital banking experience
• Segura Bank & Temenos to power new digital bank for mid to high-earners in LatAm

Be on the lookout for

Financial Technology and Banks are rapidly adopting new and emerging technologies. From the shift towards new age core banking vendors to the emergence of video KYC in Digital Banking. Regulations, such as PSD2 in Europe, are fast evolving to keep pace and further enable new advancements in the FinTech sector.

What does this evolution mean to the Banks? How can Banks adopt new tech to meet rapidly changing customer demand? How do Banks and FinTech reorient their relationship from competitive to collaborative?

Held on August 17, 2023, in Kuwait, Join the Cedar-IBSi Summit on Emerging Tech and Innovation to hear industry experts speak across topics: NextGen Banking, Payments, Lending, Digital Banking, Cloud Adoption, and more.