How 'PayPal World' could shake up cross-border payments

David Paul Morris/Bloomberg

PayPal made a slew of moves Wednesday that enabled access to several digital wallets on one platform, enhancing the company's ability to compete for the expanding cross-border payments market.

Called PayPal World, it makes PayPal and Venmo's payment apps interoperable and connects PayPal to India's UPI payment network, TenPay Global, and Mercado Pago, a large Latin American digital wallet.

This embeds PayPal deeper into a cross-border retail payment market that totaled $40 trillion in 2024, and is on pace to pass $62 trillion by 2032, according to FXC Intelligence.

It's designed to advance PayPal's new strategy under CEO Alex Chriss, who is using a mix of partners and collaboration to boost its expanding portfolio of artificial intelligence-powered payment applications. The strategy is an effort to boost branded checkout and international payments, two areas that are driving its recovery strategy following an earnings slump during the fintech downturn of 2022 and 2023. 

"It's about extending reach, being the one-stop shop, and opening doors," Gareth Lodge, a senior analyst at Celent, told American Banker. "Payments are a classic network effect: the more nodes, the greater the value."

PayPal's world

PayPal World is expected to launch in the fall and add more digital wallets over time. PayPal did not comment, but the company estimates the initial addressable for PayPal World is 2 billion users. 

"The challenge of moving money across borders is incredibly complex, and yet this platform will make it so simple for nearly two billion consumers and businesses. We believe the changes we are announcing today have the potential to be a real game changer over time," Chriss said in a press release. 

The updates make PayPal and Venmo seamless. Despite being a subsidiary of PayPal, Venmo and PayPal do not access each other directly, a remnant of Venmo having its own core processing system dating to its time as part of Braintree, a payment technology firm PayPal acquired in 2013.

Read more about cross-border payments (Cross border payments | American Banker)

The Venmo integration will enable users to make transfers across PayPal and Venmo to any location, in effect making the U.S.-only Venmo international. In 2026, the Venmo integration will expand to include the ability for Venmo users to shop at merchants outside of the U.S. 

"As an example, Venmo only operates in the U.S., and a couple of times recently, I've been asked to make a payment using Venmo which I obviously can't do," said Lodge, who is located in London. "Being able to route a payment via PayPal would solve many problems for both parties."

PayPal's stock was up more than one percent on Wednesday afternoon, ahead of the payment company's next earnings report, which will be released July 29. In a research note ahead of Tuesday's earnings and before the PayPal World announcement, analysts from Jeffries said PayPal's total payments volume may face pressure due to China-related issues, such as the trade war and reduction in travel. 

Agentic AI and Asia

By embedding with payment rails in India, China and other countries, PayPal can quickly scale in large digital payment-friendly markets. India's UPI has enabled the country to become the world's largest real-time processing market, while China's TenPay Global — a massive yet notoriously difficult country for U.S. payment companies to penetrate. 

The "real breakthrough" is PayPal's direct, interoperable integration with WeChat Pay, payments consultant Richard Crone told American Banker. 

This international scale combined with PayPal's AI-powered checkout and merchant services enables PayPal to compete with the major card networks and Paze, the bank-led digital wallet from Early Warning, the company that also manages Zelle. 

"Unlike network partners who rely on co-brand partnerships or back-end tokenization deals, PayPal World offers real-time user experience-level interoperability," Crone said. 'This will be very hard to replicate without rewriting card network infrastructure."

PayPal World also has an AI element. PayPal in 2024 released Fastlane, a product that enables checkout via a one-time passcode in a few taps. This feature uses internally developed forms of AI to draw on consumers' past payment choices to recommend a payment option, acting as a payment facilitator. PayPal in April released an agentic tool kit which developers use to integrate PayPal's application programming interfaces into AI frameworks to support "agentic AI" to manage payments, invoices, disputes and other functions. Agentic AI refers to programs that perform intuitive functions with little or no human supervision. 

"PayPal's agentic tool kit supports autonomous tender selection, local currency optimization, and offer redemption, all programmatically, with no user friction," Crone said, adding that enables PayPal to compete with payment agent AI products such as Visa Intelligence Commerce, Mastercard Agent Pay and Google Gemini's checkout technology. 

If just 50% of eligible PayPal Wallet and Venmo users engage with PayPal World's agentic features, Crone Consulting independently estimates this could unlock $6 billion or more in incremental gross margin by 2029 as agentic logic becomes default across PayPal, Venmo and related merchant software development kits. 

"I do wonder if this heralds PayPal moving into the infrastructure business more," Lodge said.