The $159 Billion Elephant in the Room: Is Stripe Really Eyeing a Deal for PayPal?

 

# The $159 Billion Elephant in the Room: Is Stripe Really Eyeing a Deal for PayPal?

**Published: February 25, 2026**

You know that feeling when you hear a rumor so big, so unexpected, that you just have to stop and say... wait, what?

That's what happened in the payments world this week.

According to Bloomberg, Stripe—the ultra-hot, privately held fintech darling valued at $159 billion—is considering buying all or parts of PayPal, the struggling pioneer that helped invent online payments as we know them .

The news sent PayPal stock up nearly 7% on Tuesday, adding to a 5.8% jump from the day before . Investors are clearly excited about the possibility. But here's the thing: the talks are reportedly "early" and "there's no certainty they will lead to a transaction" .

So what's really going on? And would a deal like this even make sense?

Let me walk you through what we know, what the experts are saying, and what it might mean for both companies—and for anyone who's ever used PayPal, Venmo, or Stripe.

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## The Short Version

**What happened:** Bloomberg reported that Stripe, the $159 billion payments infrastructure giant, is in "preliminary discussions" about acquiring all or parts of PayPal .

**How PayPal reacted:** Stock jumped nearly 7% on Tuesday, following a 5.8% gain Monday . That's a pretty clear vote of confidence from investors who think a deal could unlock value.

**The numbers:** PayPal's market cap is about $43 billion . Stripe's valuation is nearly four times that at $159 billion . So size-wise, it's feasible .

**What Stripe's founder said:** Patrick Collison acknowledged PayPal has "had a tough time over the past few years" but wouldn't comment on M&A speculation .

**Why it matters:** This would be one of the biggest fintech deals in history, potentially reshaping the entire payments landscape.

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## The Two Giants: A Tale of Two Trajectories

Before we dive into the deal talk, let's understand who we're talking about.

### PayPal: The Pioneer That Lost Its Way

PayPal was founded in the late 1990s and basically invented online payments . It survived the dot-com crash, went public, got bought by eBay, then spun out again in 2015. For years, it was the undisputed king of digital payments.

But lately? It's been a rough ride.

**The numbers tell the story:** PayPal's stock hit an all-time high near $310 in 2021 . Today, it's around $47 . That's not a correction—that's a collapse.

**What went wrong?** A few things:

- **Big Tech competition:** Apple Pay and Google Pay have eaten into PayPal's dominance . When you can check out with Face ID on your iPhone, why log into PayPal?

- **Slow to modernize:** Critics say PayPal struggled to update its technology while nimbler competitors raced ahead .

- **Leadership turmoil:** The company just ousted CEO Alex Chriss earlier this month, saying the "speed of transformation and execution... had fallen short of its expectations" . Enrique Lores takes over March 1 .

- **Weak earnings:** Fourth-quarter profit and revenue missed estimates, with payment volume growth slowing .

**Bernstein analyst Harshita Rawat** values the pieces of PayPal like this :

**Table 1: What PayPal's Parts Are Worth (Per Bernstein)**

| **Asset** | **Estimated Value** |

| :--- | :--- |

| Braintree unit | $10–$15 billion |

| Venmo | ~$5 billion |

| Core PayPal business | $20–$25 billion |

Add it up, and you're in the $35–$45 billion range—roughly where PayPal trades today.

### Stripe: The Hotshot Upstart

Stripe, founded by Irish brothers Patrick and John Collison, has become the most coveted name in fintech . They provide the behind-the-scenes payment infrastructure for countless online businesses—think of them as the plumbing for the internet economy.

**Key facts about Stripe :**

- **Valuation:** $159 billion, up from $91 billion just a year ago

- **Revenue Suite:** On track to hit $1 billion in annualized revenue this year

- **Total payment volume:** Roughly $1.4 trillion 

- **Status:** Privately held, no immediate IPO plans (Collison says going public would distract from product focus) 

**What makes Stripe different?** They've built their business around developers and businesses, not consumers. If you've ever bought something online and seen a smooth checkout experience, there's a good chance Stripe was behind it.

But here's the interesting gap: Stripe doesn't have much of a consumer presence. You don't have a Stripe wallet or a Stripe app on your phone. That's where PayPal comes in .

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## Why Would Stripe Want PayPal?

This is the billion-dollar question. Let's look at the strategic logic.

### The Braintree Angle

**Mizuho analyst Dan Dolev** points out that Stripe already processes about $1.4 trillion in payments . Acquiring PayPal's Braintree unit would add roughly **$700 billion** in additional volume.

That's not just incremental growth—it's a massive leap in scale that would strengthen Stripe's position against competitors like Adyen .

### The Consumer Gap

Here's something interesting: Stripe is a B2B powerhouse, but it lacks what analysts call "last-mile visibility" with consumers . They don't have a consumer brand or a wallet in your pocket.

PayPal, on the other hand, is one of the few globally recognized consumer payment networks . And then there's Venmo—widely considered the most powerful peer-to-peer payment brand out there, especially among younger users .

Imagine Stripe's backend infrastructure combined with PayPal and Venmo's frontend consumer reach. That's a formidable combination.

### The Stablecoin Play

Here's a forward-looking angle: Dolev suggests that together, Stripe and PayPal "could become a meaningful stablecoin player" as these digital currencies become more important in global commerce .

That's not just about today's business—it's about positioning for the future of money.

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## What the Analysts Are Saying

Wall Street has been busy chewing on this news. Here's what the experts think.

**Table 2: Analyst Takes on a Potential Stripe-PayPal Deal**

| **Analyst/Firm** | **Key Point** |

| :--- | :--- |

| Dan Dolev, Mizuho | Deal is "feasible from a size perspective" given Stripe's $159B valuation vs. PayPal's $43B market cap . Sees strategic logic in combining Stripe's B2B strength with PayPal's consumer reach. |

| Harshita Rawat, Bernstein | Speculated Stripe could be interested in Braintree ($10-15B) even before buyer was named. Also flagged JPMorgan, private equity, Revolut, and Amex as potential suitors . |

| Madison Suhr, Raymond James | Thinks a full sale is unlikely given the massive price tag (over $50B). But a buyer could target high-growth assets like Venmo . |

**The valuation disconnect** is worth noting. Mizuho's Dolev points out that PayPal trades at just **7x forward earnings** for 2027, far below its five-year average of 20x . That's either a screaming bargain or a value trap—depending on who you ask.

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## The Challenges: Why a Deal Might Not Happen

For all the excitement, there are some serious hurdles.

**1. It's early.** Like, really early. The discussions are "preliminary" and there's "no certainty they will lead to a transaction" . This could easily go nowhere.

**2. Regulatory scrutiny.** Any deal of this size would face intense antitrust review. The combined company would be a payments behemoth.

**3. Integration risk.** Merging two massive companies with different cultures, technologies, and customer bases is brutally hard. Tech M&A is littered with failures.

**4. Stripe's focus.** Patrick Collison has said an IPO would distract from product focus . A massive acquisition would be even more distracting.

**5. PayPal's complexity.** It's not just one business—it's Braintree, Venmo, the core PayPal wallet, and more. Untangling what Stripe would want and what would be left behind is messy.

**6. The price tag.** Even at $43 billion, this would be one of the largest fintech acquisitions ever. And PayPal's board might push for a premium on top of that.

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## What Both Companies Are Saying

Officially? Not much.

**Stripe's response:** "Declined to comment" .

**PayPal's response:** "Declined to comment" .

**Patrick Collison, Stripe president** (in an interview this week): "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, merger and acquisition hypotheticals but they have definitely had a tough time" .

That's not a denial. But it's not a confirmation either.

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## What This Means for You

### If You're a PayPal User

Honestly, probably not much in the short term. These are early talks. Even if a deal happens, your PayPal and Venmo accounts would keep working.

Longer term? A combined Stripe-PayPal could mean smoother payments, better integration, and maybe some cool new features. But that's years away, if ever.

### If You're a Stripe User

Same story. Your business would keep running on Stripe's infrastructure. If they acquired PayPal, you might eventually see new capabilities—like access to Venmo's user base—but nothing immediate.

### If You're an Investor

This is where it gets interesting.

PayPal's stock has been crushed. It's trading at historically low multiples. If you believe a deal could happen—or that other buyers might emerge—there could be upside.

But here's the caution: the stock jumped nearly 13% over two days on this news . That's a lot of optimism priced in already.

**Raymond James analyst Madison Suhr** thinks a full sale is unlikely, but notes that "buyers may be interested in high-growth assets such as Venmo" . So maybe the real action is in piecemeal deals, not a full acquisition.

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## The Bigger Picture: What This Says About Fintech

Stepping back, this rumored deal tells us something about where the payments industry is heading.

**The winners and losers are getting sorted out.** Stripe is on top—growing fast, highly valued, picking its shots. PayPal is struggling—losing share, changing leadership, trading at distressed levels.

**Scale matters.** In payments, bigger is often better. More volume means better data, better pricing, better economics. A combined Stripe-PayPal would be a true powerhouse.

**Consumer relationships are valuable.** Stripe's lack of consumer presence is a real gap. PayPal and Venmo fill that perfectly.

**The next wave is coming.** Stablecoins, crypto, new payment rails—the future of money is being built now. The companies that control both infrastructure and consumer access will be well positioned.

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## Frequently Asked Questions

**Q: Is Stripe definitely buying PayPal?**

A: No. The talks are "preliminary" and "there's no certainty they will lead to a transaction" . This could easily go nowhere.

**Q: How much would a deal cost?**

A: PayPal's market cap is about $43 billion . Any acquisition would likely require a premium on top of that, so probably over $50 billion.

**Q: Can Stripe afford that?**

A: Stripe's valuation is $159 billion , so size-wise it's feasible . But they'd need to raise a lot of cash or do a stock deal, which is complicated since Stripe is private.

**Q: Why would Stripe want PayPal?**

A: Strategic logic includes: adding Braintree's $700 billion in volume, gaining consumer-facing brands (PayPal and Venmo), and potentially building a stablecoin business .

**Q: What's Braintree?**

A: It's PayPal's payment processing unit for businesses. Bernstein values it at $10–$15 billion .

**Q: What's Venmo worth?**

A: Bernstein estimates about $5 billion . It's the leading peer-to-peer payment app, especially popular with younger users.

**Q: What did PayPal's stock do on the news?**

A: Jumped 5.8% Monday and another 6.7% Tuesday . That's nearly 13% in two days.

**Q: Who else might be interested in PayPal?**

A: Bernstein analyst Harshita Rawat suggested JPMorgan, private equity firms, Revolut, and American Express could also be potential suitors .

**Q: Is PayPal's stock cheap?**

A: Mizuho's Dan Dolev notes PayPal trades at about 7x forward 2027 earnings, far below its five-year average of 20x . By that measure, yes—it's historically cheap.

**Q: When would a deal happen?**

A: If it happens at all, not anytime soon. These are early-stage talks. Any deal would take months to negotiate and then face regulatory review.

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## The Bottom Line

Here's what I keep coming back to.

Two companies. One at the peak of its powers, valued at $159 billion and growing fast. The other at a low point, trading at $43 billion after years of decline.

A deal would make strategic sense—Stripe gets consumer reach, PayPal gets a lifeline and a powerful parent. Together, they'd be a formidable force in global payments.

But the hurdles are real. Early-stage talks often go nowhere. Regulatory scrutiny would be intense. Integration would be brutal.

For now, this is a fascinating rumor that tells us something about where the industry is headed. The strong are getting stronger. The weak are vulnerable. And in fintech, size and strategy matter more than ever.

Whether this deal happens or not, one thing is clear: the payments landscape is shifting under our feet. And the companies that adapt—through acquisition, innovation, or both—will shape how we all pay for years to come.

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*Got thoughts on a potential Stripe-PayPal deal? Think it makes sense or crazy? Drop a comment and let me know.*