Stripe Eyes PayPal Acquisition in Deal That Could Reshape Payments Industry

Quick Facts

• Stripe is exploring an acquisition of all or parts of PayPal Holdings, though discussions remain in early stages with no formal offer made
• PayPal’s stock jumped nearly 7% after the Bloomberg report, despite the company’s shares falling 80% from 2021 highs and 19% year-to-date
• Stripe’s $159 billion valuation dwarfs PayPal’s $43 billion market cap, making the deal feasible from a size perspective according to analysts

Payment processing firm Stripe is considering an acquisition of all or parts of PayPal Holdings, according to people familiar with the matter. The discussions remain exploratory with no formal offer made.

PayPal shares closed nearly 7% higher following the February 24 report. The stock has struggled significantly, tumbling about 80% from record highs hit in 2021 and dropping more than 19% since the start of the year.

Stripe processed $1.9 trillion in transactions last year and is making a tender offer valuing the company at $159 billion, a 74% increase from the previous year. The company’s revenue suite is slated to reach an annual run rate of $1 billion this year.

PayPal reported revenue of $8.68 billion for the holiday quarter, missing analysts’ average estimate of $8.80 billion. The company recently replaced CEO Alex Chriss and issued a lackluster profit forecast for 2026.

Mizuho analyst Dan Dolev noted that Stripe’s estimated $159 billion valuation makes a deal “feasible from a size perspective” compared to PayPal’s $43 billion market capitalization. Bernstein analyst Harshita Rawat speculated that Stripe could target PayPal’s Braintree unit, which she values at $10-15 billion.

“While Stripe is widely viewed as a strong B2B player, it lacks consumer-facing, last-mile visibility,” Dolev said. Acquiring PayPal’s Braintree unit would add roughly $700 billion in additional transaction processing volume.

The potential deal would combine two companies with growing interest in stablecoins and crypto payments infrastructure. Ryan Yoon, senior analyst at Tiger Research, called it “a vertical integration of legacy infrastructure and modern API stacks.”

PayPal has faced mounting competition from Apple Pay, Google Pay, Block’s Square, and buy-now-pay-later services like Affirm and Klarna. The company’s Venmo unit surpassed 100 million active accounts and generated $1.7 billion in revenue.

A combined entity would create a dominant force spanning both business-to-business and consumer payments, potentially intensifying pricing pressure on independent processors and smaller fintech firms.

Both Stripe and PayPal declined to comment on the report. Stripe co-founder John Collison told CNBC the company isn’t yet aiming for an IPO, focusing instead on product and business growth.

Read more: Stripe is reportedly eyeing deal to buy some or all of PayPal