PayPal can't afford to offer installment to all customers...

PayPal can't afford to offer installment to all customers worldwide, cashflow will be big issue. Do simple calculation, PayPal has 350m user, if everyone use this function, PayPal will need a huge amount of cash to pay to merchant upfront. That's why they only try it in US market with $600 limit. bnpl is not the market PayPal want to entry but no choice as the market is booming.
Apt and other bnpl players have already predicted PayPal and others will join the game, see article on AFR today from SZL director. Plus, more ppl will know bnpl now, free advertising for bnpl players.
Market is big enough and bnpl is still new like PayPal 20 years ago.