Customers of Microsoft stores in countries including the US, UK and Germany will now have the option to use PayPal’s ‘Pay Later’ solution.

Eligible customers, also based in Australia, France, Spain, and Italy, will be able to pay for their purchases over a course of weeks or months in fixed amounts.

Additionally, users in the US will have the option to pay using Venmo, which is currently available in the Microsoft Store on Xbox.

Microsoft claims that the partnership will offer users more flexible payments, increase customer loyalty and help customers better manage their budget.

"For over 16 years, PayPal checkout has been a trusted method for Microsoft Store customers to purchase products like Surface devices and Xbox consoles and accessories, as well as Microsoft 365's product suite," said Kurt Campisano, SVP of strategic accounts, PayPal. "We are thrilled to expand our partnership with Microsoft to offer them access to our full suite of capabilities that will create a beautiful customer experience across the entire shopping journey."

Last month global investment firm KKR announced an exclusive multi-year deal to buy up to €40 billion of Buy Now, Pay Later (BNPL) loans from PayPal.

KKR’s private credit funds and accounts will acquire all of PayPal’s European BNPL portfolio at close of transaction, along with future originations of eligible BNPL loans.

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