Per Bloomberg, discussions are still at an early stage and there is no certainty a deal will happen. Both companies declined to comment.

Shortly after, PayPal shares rose 6.7% to $47.02 in New York on Tuesday. That gives the company a market value of about $43.3 billion.

Stripe, which is still privately held, recently confirmed a $159 billion valuation in an employee tender offer. The company was founded by brothers Patrick Collison and John Collison. It has grown into one of the most valuable financial technology firms in the world.

Speaking this week, Patrick Collison said: “PayPal has had, obviously, a tough time over the past few years and the landscape has changed quite a bit with Apple Pay and Google Pay and everything like that. I can’t talk about any, you know, M&A hypotheticals but they’ve definitely had a tough time.”

PayPal was founded in the late 1990s and helped build early online payments. In recent years, however, it has faced slower growth.

Digital wallets such as Apple Inc.’s Apple Pay and Alphabet Inc.’s Google Pay have taken market share. The company’s fourth-quarter revenue and profit fell short of analysts’ estimates. Payment volumes have also slowed.

At the same time, PayPal is changing its leadership. Enrique Lores will become president and chief executive on March 1, replacing Alex Chriss, who was removed earlier this month. David Dorman has been appointed board chair.

Stripe, meanwhile, has continued to expand. The company processed $1.9 trillion in payment volume in 2025. It has also secured a US national bank trust charter for its stablecoin subsidiary, Bridge, showing plans to strengthen its role in regulated digital payments.

If the acquisition of PayPal by Stripe proceeds, the transaction could rank among the largest deals in the financial technology sector.

This is one of the biggest steps yet in integrating digital payments with conversational technology.

Under this new arrangement, PayPal will adopt OpenAI’s Agentic Commerce Protocol (ACP) to power Instant Checkout, a feature that allows users to confirm orders and complete transactions inside ChatGPT without switching platforms. 

Beginning in 2026, PayPal’s extensive merchant network will be connected to OpenAI’s ecosystem, opening ChatGPT’s marketplace to tens of millions of businesses globally.

“Hundreds of millions of people turn to ChatGPT each week for help with everyday tasks, including finding products they love, and over 400 million use PayPal to shop,” said Alex Chriss, president and CEO of PayPal. 

“By partnering with OpenAI and adopting the Agentic Commerce Protocol, PayPal will power payments and commerce experiences that help people go from chat to checkout in just a few taps for our joint customer bases.”

The integration will allow customers to pay using their PayPal wallets, providing access to multiple funding sources, including cards, bank accounts, and balances, while ensuring the company’s signature buyer and seller protections. 

PayPal will also handle payment processing for card transactions through its delegated payments API, streamlining every stage of the transaction process.

For merchants, the new system offers a direct route into ChatGPT’s massive user base. Small businesses and large retailers alike will see their product catalogues, spanning categories such as apparel, beauty, home improvement, and electronics, become searchable and purchasable within ChatGPT. 

PayPal’s ACP server will handle everything behind the scenes, from merchant routing to payment validation, removing the need for individual integrations.

Beyond commerce, PayPal is expanding its internal use of OpenAI’s technologies. The company plans to deploy ChatGPT Enterprise for its 24,000 employees, use Codex to support engineering tasks, and integrate OpenAI’s APIs across its operations. 

These tools are expected to enhance product innovation and improve customer service efficiency.

The partnership arrives at a time when AI-driven shopping assistants are changing online retail. Such systems can analyse user preferences, compare prices, and execute purchases autonomously, revealing the focus on agentic commerce, where digital assistants play an important role in buying decisions.

PayPal’s move is a turnaround strategy under Chriss, who has steered the company towards profitability and innovation after years of post-pandemic slowdown.

With this integration, PayPal aims to strengthen its presence “anywhere and everywhere that consumers want to pay,” as Chriss told analysts. 

The deal, announced on Wednesday, will see PayPal’s payment technology embedded into Google’s ecosystem, from consumer apps to enterprise services.

Both companies say the collaboration is the beginning of a new era in “agentic commerce”, a model where artificial intelligence tools take on more responsibility in helping users discover products, compare options, and even complete purchases with little to no manual input.

“Through this partnership, PayPal will use our industry-leading AI to enhance services and security, and we will more deeply integrate PayPal’s innovative payment capabilities for a better experience across Google products and platforms,” said Sundar Pichai, CEO of Google parent Alphabet.

PayPal’s Enterprise Payments will now be one of Google’s main payment providers. That means it will handle card transactions on Google Cloud, Google Ads, and Google Play. This places PayPal at the centre of some of Google’s most valuable revenue streams.

PayPal is also migrating parts of its infrastructure to Google Cloud, a transition designed to speed up innovation and expand its AI-driven commerce tools globally. It highlights a growing trend of fintechs leaning on hyperscale cloud providers for scale and security.

Security and trust are also at the core of the deal. PayPal will integrate its identity and fraud prevention tools across Google’s platforms, while Google backs the Agent Payments Protocol (AP2), a proposed standard to safeguard agent-led transactions. 

This is important as AI-powered systems begin making decisions on behalf of users, raising fresh questions about consent, fraud risks, and transparency.

PayPal CEO Alex Chriss described the tie-up as “a new standard for commerce ecosystem innovation.” This is less about payments as we know them and more about boosting how the future of online transactions will be managed by intelligent systems.

The announcement follows another recent step by PayPal into AI partnerships. Earlier this month, it teamed up with Perplexity to give its users early access to the AI-powered Comet browser through a 12-month Pro subscription trial. 

The browser uses artificial intelligence to deliver direct, summarised answers, placing PayPal at the very beginning of the online shopping journey, not just the end.