Stripe Said to Be Weighing a Bid for PayPal…Potentially Reshaping the Payments Landscape

Global payments company Stripe is said to be considering an acquisition of PayPal.

According to Bloomberg on the 24th (local time), Stripe has expressed preliminary interest in acquiring all of PayPal or certain assets. People familiar with the matter said the talks are at an early stage and it remains unclear whether they will lead to an actual deal. Stripe and PayPal declined to comment.

In New York trading that day, PayPal shares closed up 6.7% at $47.01. Its market capitalization stood at about $43.3 billion.

Founded in the late 1990s, PayPal is regarded as an early pioneer in digital payments, but in recent years it has struggled to modernize its technology. Competition has intensified as Apple and Alphabet have expanded market share with Apple Pay and Google Pay, respectively.

Stripe is a privately held company founded by brothers Patrick Collison and John Collison. It recently said it was valued at $159 billion through a tender offer for employee-held shares.

John Collison, president of Stripe, said, "PayPal has clearly had a difficult few years, and the market environment has changed significantly." He declined to address specific matters related to mergers and acquisitions.

PayPal’s fourth-quarter results showed revenue and net profit missed market expectations, while a slowdown in payment volume also persisted. Board Chairman Enrique Lores is set to take office as the new chief executive officer (CEO) on March 1, replacing Alex Chriss, who was recently dismissed.