PayPal’s fall from dominance and Stripe’s ascent to a $159bn valuation have set the stage for a deal that could reshape global payments
Payments infrastructure firm Stripe is understood to be weighing an acquisition of PayPal, or parts of its business, in what would rank among the most consequential consolidations in the history of digital payments.
As first reported by Reuters, deliberations remain at an early stage, and no transaction is assured. Both companies declined to comment when approached by Payment Expert.
Yet the mere report of exploratory interest sent PayPal’s shares up nearly 7% on 24 February, reflecting the market’s view that a deal carries genuine logic.
It is worth noting that on the same day acquisition rumours began circling, Stripe confirmed it had reached a valuation of $159bn through an employee tender offer, underlining the scale of financial firepower a privately held Stripe could theoretically bring to bear over a beleaguered PayPal.
In its annual letter for 2025, Stripe co-founding brothers Patrick and John Collison said: “Our programmable financial services now power more than 5 million businesses directly or via platforms, including all of the top AI companies… All in all, 2025 was a strong year for the internet economy.”
PayPal, by contrast, carries a market capitalisation of roughly $43bn, a fraction of its pandemic-era peak when its stock briefly hit $308 per share in July 2021, implying a valuation of around $340bn.
This collapse in value, and the strategic drift it reflects, goes a long way towards explaining both why PayPal has become an acquisition target and why Stripe might see an opportune moment.
Has PayPal lost its edge?
To understand what Stripe would actually be buying, it helps to trace how PayPal arrived at this point. Founded in the late 1990s, the company was a genuine pioneer, helping to normalise online payments at a time when sending money digitally was still quite novel.
For years it remained the default choice for both merchants and consumers, and the pandemic-driven surge in e-commerce turbo-charged its volumes and share price.
But Apple Pay and Google Pay, backed by the distribution power of two of the world’s most valuable companies, were steadily embedding themselves into consumers’ daily routines, and as pandemic-era growth cooled, that competitive erosion became impossible to ignore.
Investors had worried about this encroachment for years, and those concerns proved well founded. Alex Chriss had taken the Chief Executive Officer role from Dan Schulman in 2023, a move widely seen at the time as the catalyst for a much-needed modernisation.
However, Chriss was removed this month after the company issued a profit outlook that missed analyst expectations by a wide margin.
The board concluded that the pace of transformation had fallen short, and now former Chair Enrique Lores has been appointed as his replacement, taking up the role of President and CEO from 1 March, with David Dorman stepping in as the new board Chair.
The fourth-quarter results that precipitated Chriss’s departure reinforced the difficulty of PayPal’s position, with revenue and profit both missing estimates, and payment volumes continuing to slow.
Weak consumer spending, elevated interest rates and increased competition have weighed on the discretionary transactions that form a meaningful part of the company’s revenue base.
Former CEO David Marcus recently criticised the strategic drift at PayPal, saying on X: “I left PayPal in 2014 because I was deeply frustrated.”
A few thoughts about PayPal, nearly 12 years after I left.
I woke up this morning to dozens of messages from former PayPal colleagues. It pushed me to finally speak up.
I never spoke publicly about the company after I left. Part of that was loyalty to John Donahoe, who gave me…
— David Marcus (@davidmarcus) February 3, 2026
So, while PayPal retains considerable assets, its ability to effectively monetise them has come into sharper focus, which is where Stripe may see its opportunity.
What Stripe would be getting
Stripe has built its business on developer-friendly payment infrastructure, providing the underlying plumbing for digital commerce rather than competing for consumer attention directly.
Its services allow enterprises to accept payments, manage payouts and automate financial processes, and that focus has made it the backbone of choice for a generation of digital-native businesses.
Stripe’s President, John Collison, acknowledged this week that PayPal has had a “tough time” as the landscape shifted, though he declined to engage with acquisition speculation directly, as reported by Bloomberg.
For Stripe, the appeal of PayPal is a line of business that it does not currently have at scale. PayPal’s installed merchant network is vast, its consumer brand recognition remains strong despite recent difficulties, and its Venmo subsidiary gives it a well-used domestic peer-to-peer (P2P) payments platform.
PayPal also processed more than $33bn in buy-now-pay-later (BNPL) volume globally in 2024, a product line Stripe does not offer in any comparable form. For businesses that currently rely on multiple payment providers, a combined entity could offer a breadth of capability that neither possesses alone.
It is a proposition that arrives at a moment when the payments industry is already deep into a consolidation cycle. Global Payments‘ $24bn acquisition of Worldpay and FIS‘s subsequent $13.5bn counter-move to acquire Global Payments’ issuer solutions business are two of the most visible recent examples of larger players racing to broaden their stacks and reduce the number of vendors their clients need to manage.
While the deliberations of a Stripe, PayPal acquisitions are still early – and it is worth emphasising these are deliberations only at this stage – the complexity of integrating two large payments businesses would be significant, and the price would need to satisfy a PayPal board that has its own view of the company’s worth.
But the reported interest alone has refocused attention on a question the sector has been circling for some time: whether PayPal’s accumulated assets are better deployed under new ownership than through another attempt at a standalone recovery.
Simon Taylor, Head of Market Development at Tempo believes so, saying that PayPal is now “an M&A target”, not a “growth company”.
Yet, notwithstanding Stripe’s adeptness in M&A activity historically, Taylor feels an acquisition attempt of this size will be difficult to pull off for the payment infrastructure giant.
“PayPal isn’t a 50-person startup. It’s 400 million accounts, a brand new CEO, and a decade of cultural debt,” he says.
“That’s a completely different integration problem.”
