Shares of PayPal Holdings (PYPL) advanced on Tuesday after the electronic payment system provider struck a deal with KKR that allowed private capital the company will buy up to 40 million euros ($43.7 million) of PayPal “buy now, pay later” (BNPL) loans in Europe.

The companies said that under the deal, KKR’s private credit funds and accounts would acquire “substantially the entire European credit portfolio of BNPL” and BNPL’s future sources of eligible credit.

PayPal noted that the transaction, which is expected to close in the second half of the year, will initially generate $1.8 billion. It expects to use $1 billion of that for incrementals share buybackswhich would bring those buybacks to $5 billion this year.

Gabrielle Rabinovitch, PayPal’s senior vice president and acting chief financial officer, explained that BNPL has become a “major contributor to PayPal’s checkout experience” and working with KKR will allow the firm to accelerate the creation of PayPal Pay Later along with market demand in Europe while “maintaining free cash flow for other strategic initiatives.”

Vaibhav Piplapure, managing director of KKR, said the move deepens the company’s footprint in consumer finance and that PayPal Pay Later “offers a differentiated experience that enables PayPal to gain further share in this growing market”.

PayPal shares rose 3.7% on Tuesday after the news.