Stripe Eyes Potential Acquisition of PayPal — A Mega Shakeup in Digital Payments

On February 24, 2026, Bloomberg dropped a report that sent shockwaves through fintech: Stripe, the privately-held payments juggernaut freshly valued at $159 billion, is considering an acquisition of all or parts of PayPal Holdings. PayPal's stock jumped 6.7%. Trading briefly halted. And for a moment, the payments industry held its collective breath.

Both companies declined to comment. Discussions are described as early-stage, and sources cautioned that no deal is guaranteed. But the mere possibility of this combination, one that would unite two of the most recognizable names in digital payments, is enough to fundamentally shift how the industry thinks about consolidation, competition, and what it means to win in payments in 2026.

To understand why this matters, you have to understand how far PayPal has fallen, and how far Stripe has come.

How PayPal Got Here

PayPal's story over the past four years is a masterclass in how quickly a category leader can lose its edge. At its pandemic peak in July 2021, the company's stock hit $310 per share — a valuation that briefly made it worth more than Mastercard. Today, shares trade in the mid-$40s, a decline of roughly 85% from that high.

The causes are well-documented but worth naming clearly: Apple Pay and Google Pay commoditized the checkout button. Cash App and Zelle ate into Venmo's cultural dominance among younger users. Braintree, the unbranded processing arm PayPal acquired for $800 million in 2013, became a race-to-the-bottom pricing war with enterprise merchants. And when the pandemic-era online shopping boom faded, PayPal found itself exposed, a company that had ridden a wave without building the engine to generate its own.

Leadership instability compounded the operational problems. CEO Alex Chriss, brought in from Intuit in 2023 to lead a turnaround, was ousted in February 2026 after the company projected a mid-single-digit decline in adjusted profit per share for the year, missing Wall Street expectations by a meaningful margin. Enrique Lores, previously PayPal's board chair, is set to take over on March 1, making this a company in the middle of a leadership handoff at the exact moment acquisition interest is peaking.

Breaking Up Is Hard to Do — Or Is It?

Bloomberg's reporting is careful to note that Stripe isn't necessarily thinking about a full acquisition. The option of buying select assets, most notably Braintree or Venmo, appears to be on the table. This matters enormously, because PayPal's parts may be worth more than the whole.

Bernstein analyst Harshita Rawat has published a "sum-of-the-parts" analysis suggesting exactly that. Here's how the numbers look:

The "sum-of-parts" figure lands somewhere between $35B and $45B, roughly consistent with where PayPal trades today. That's the irony: the market has essentially priced in a breakup scenario already. A buyer comfortable running a more complex integration could potentially justify paying a meaningful premium.

What Stripe Actually Gets

Stripe's core business is almost entirely B2B. The company processes $1.9 trillion in transactions annually, serves millions of businesses from startups to enterprises, and has built infrastructure that touches most corners of the internet economy. But it has a conspicuous gap: consumers barely know Stripe exists.

PayPal is the mirror image. Hundreds of millions of consumers trust the PayPal button. Venmo is a verb. But its enterprise and developer infrastructure has fallen behind Stripe's. The two companies are, in a very real sense, each other's missing piece.

Add the crypto dimension and the picture gets even more interesting. Stripe's acquisition of Bridge, a stablecoin infrastructure company, has seen its transaction volume quadruple, and the company has openly discussed its ambitions in blockchain-based payments. PayPal's PYUSD stablecoin and its blockchain payment rails are natural complements. A combined entity would arguably be the most powerful stablecoin-enabled payments infrastructure in the world.

The Deal That Makes Wall Street Nervous

Not everyone is a buyer. The skeptics raise fair points, and they deserve airtime.

First, there's the regulatory question. Any combination of two companies that together process north of $3.5 trillion in annual transactions would draw intense scrutiny from the DOJ, FTC, and likely European competition regulators. The same antitrust environment that blocked several major tech mergers in recent years would apply here with full force.

Second, Stripe has explicitly and repeatedly said it is not pursuing an IPO. A PayPal acquisition, particularly of the full company, would almost certainly require some form of public equity or debt financing at a scale that would fundamentally change Stripe's capital structure. John Collison, Stripe's co-founder, told CNBC on the same day as the Bloomberg report that an IPO is not on his priority list. A nine-figure acquisition complicates that stance considerably.

Third, cultural integration is genuinely hard. Stripe is an engineering-first, API-driven company where speed and developer experience are almost religious values. PayPal is a legacy consumer company with a 25-year-old brand, complex customer service operations, and the organizational gravity that comes with 23,000+ employees. Merging the two without wrecking both is not a given.

What This Means for the Payments Ecosystem

Whether this deal happens or not, and the odds, right now, are genuinely unclear, the story itself tells us something important about where payments is heading.

The era of the pure-play payments processor is over. The winners in the next decade won't be companies that simply move money efficiently. They'll be companies that own both the enterprise infrastructure and the consumer relationship, that span stablecoins and traditional rails, that have developer communities and brand trust simultaneously. Stripe has built one side of that equation beautifully. PayPal once owned the other side, and is now selling it at a steep discount to its former self.