Shares of PayPal (NASDAQ:) climbed Tuesday after it announced a pact to sell $3.3 billion of buy now, pay later loans in Europe to private equity firm KKR & Co. (NYSE:). KKR also agreed to purchase future loans, with a total deal value of about $43.6B.

Buy now, pay later (BNPL) is an increasingly popular method of payment that allows customers to pay the cost of a purchase over time.

“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,” said PayPal’s acting CFO Gabrielle Rabinovitch.

“We are thrilled to deepen our footprint in consumer finance through this transaction and to work with one of the leading players in this space,” said Vaibhav Piplapure, a managing director at KKR.

PayPal will allocate approximately $1B to incremental share repurchases in 2023 after the deal closes, increasing the total amount from $4B to $5B.

Commenting on the deal, analysts at Keefe, Bruyette & Woods said, “The news should be a headline positive with the company pointing to an incremental $1B in repurchases for the year ($5B total), while other impacts are already contemplated in the company’s existing outlook.”

Shares of PayPal climbed 3% following the announcement. Shares are slightly lower year-to-date, lagging broader markets.