- Key insights: Stripe is considering acquiring all or parts of PayPal, according to Bloomberg.
- What's at stake: PayPal is struggling and could sell at a discount, while Stripe's valuation is on the rise, setting the stage for a potential deal.
- Forward look: Stripe could face other bidders for PayPal.
With
Stripe, which Wednesday reported a jump in its valuation to $159 billion, is
"I'm not surprised about the speculation that some or all of PayPal is in play. Attempts by previous leadership to rationalize the portfolio have had mixed results, making a merger or divestiture of some kind plausible," Aaron Press, research director for IDC, told American Banker, noting PayPal's recent earnings miss and the selection of Enrique Lores to
AI and merchants are the prize
Stripe, which is a privately held company and does not issue a formal earnings report, on Wednesday said it has signed agreements with investors to provide liquidity to current and former Stripe employees, and other shareholders, through a tender offer at $159 billion. While the majority of funds for the tender offer are being provided by investors including Thrive Capital, Coatue, a16z and others, Stripe will also use a portion of its own capital to repurchase shares.
Stripe also reported what it called a "strong year," saying businesses running on Stripe generated $1.9 trillion in total volume, up 34% from 2024, and equivalent to roughly 1.6% of global GDP. Stripe's Revenue suite, or non-payment products such as Stripe Billing, Invoicing and Tax, is on pace to reach an annual run rate of $1 billion this year. The company's management also called out its progress in artificial intelligence.
"Our programmable financial services now power more than 5 million businesses directly or via platforms, including all of the top AI companies, many of the largest blue-chip companies, most of the biggest tech companies (80% of the Nasdaq 100), and a significant fraction of freshly minted startups," Stripe co-founders John and Patrick Collison said in the company's shareholder letter. "All in all, 2025 was a strong year for the internet economy, and we're delighted to see so many of Stripe's customers do so well."
Stripe said it is working with partners across AI labs, retailers and e-commerce platforms to lay the groundwork for the migration to agentic commerce. This includes an agentic commerce protocol and an Agentic Commerce Suite, which sells tools for businesses to use across multiple AI interfaces and protocols with a single integration. Early adopters include Anthropologie, Urban Outfitters, Etsy, Coach and Kate Spade. PayPal would be a fit for that strategy. While PayPal has struggled in recent quarters, it has made major investments in
"Stripe knows this is a fire sale and is bottom feeding, hoping to buy PayPal or cherry-pick assets like Braintree at a deep discount to its own $159B valuation, all with the ultimate goal of using PayPal to secure a viable position in agentic commerce," Richard Crone, a payments consultant, told American Banker. "Despite the recent management shakeup, PayPal remains a leader."
PayPal additionally has a range of properties and capabilities that are likely to be attractive to Stripe, Press said, adding PayPal has a significant acquiring portfolio, the Braintree gateway, core wallet and checkout offerings that have significant global presence and could complement Stripe's existing offerings that power wallets for platforms. "Ancillary offerings, such as fraud management or conversion optimization, could also be leveraged," Press said. "Venmo may be more challenging, but Stripe could give the system additional scale with merchants."
Adding Stripe as a potential owner would be good for PayPal, giving it a much-improved framework for selling its services to small and medium-size businesses, according to Aaron McPherson, principal at AFM Consulting.
"Stripe, for its part, would gain a leading consumer-facing brand, moving it into new markets and vastly increasing its scale," McPherson told American Banker, noting Stripe could also leverage PayPal's PYUSD stablecoin to advance its own stablecoin strategy.
A bidding war?
Stripe and PayPal would not comment on the rumors, which were initially reported by Bloomberg without on the record attribution.
Even at a $159 billion valuation, it's hard to see Stripe being able to afford what it would take to win the bidding war that would ensue with the AI super powers, Crone said, noting firms like Google, Microsoft, OpenAI, Perplexity, Meta and Anthropic could be interested.
"By adding PayPal, large language models — the technology behind new forms of AI, can marry buyer reasoning, deliberation history and intent scoring to a proprietary payment credential," Crone said.
Stripe is likely leading the speculation as much due to its valuation as to the overall strategic fit, Press said.
"That said, valuation is not the same as cash, and any transaction of this scale involving Stripe would be a feat of financial engineering," Press said, noting a private equity buyer is also a possibility. "There aren't many strategic buyers that could realistically contemplate such a move."
PayPal and Stripe would also be a complicated integration, according to McPherson, noting the two companies have different cultures and very different tech stacks.
"Despite Stripe's $159 billion valuation, this would be a big acquisition, and could become a distraction," McPherson said. "Stripe is not the only interested party, so we will probably hear about others shortly that may be a better fit."
