Stripe Reportedly Explores Acquisition of PayPal, Mizuho Cites Consumer Reach and Stablecoin Synergies

Privately held payments giant Stripe is reportedly in early-stage discussions to acquire all or part of PayPal Holdings, according to sources familiar with the matter, a potential deal that would combine two of the most prominent players in digital payments.

Mizuho analysts noted that Stripe’s recent $159 billion valuation—a 74% increase from last year—significantly exceeds PayPal’s approximately $43 billion market capitalization, making a transaction “feasible from a size standpoint,” while highlighting that PayPal’s consumer brands, including Venmo, and its Braintree merchant infrastructure could strategically complement Stripe’s core business-to-business focus.

Acquisition Discussions and Market Reaction

Stripe has expressed preliminary interest in a potential acquisition of all or parts of PayPal, though discussions remain in very early stages and no formal offer has been made, with no guarantee a deal will ultimately materialize. The news follows earlier reports that PayPal had held meetings with banks after receiving unsolicited takeover proposals from potential suitors.

Market reaction was immediate, with PayPal shares surging nearly 7% on the day of the report, climbing to approximately $47 per share, though the stock remains well below its 52-week high of $79.50. The company’s market capitalization currently stands at roughly $43 billion, reflecting a significant decline from previous years amid slowing growth and intensifying competition in digital payments.

Stripe, headquartered in Dublin and San Francisco, recently completed a tender offer for current and former employees that valued the company at $159 billion, a substantial increase from $106.7 billion last year. Investors participating in the share sale include Thrive Capital, Coatue, and Andreessen Horowitz, with Stripe also using its own capital to repurchase shares. The company reported that businesses using its platform generated $1.9 trillion in total payment volume during 2025, up 34% from the previous year.

Strategic Rationale: Consumer Reach and Merchant Scale

Mizuho analysts outlined several strategic benefits that could drive Stripe’s interest in acquiring PayPal. Long viewed primarily as a business-to-business payments provider, Stripe would gain a scaled consumer brand presence through PayPal and its peer-to-peer payment app Venmo, which analysts describe as the “ultimate” consumer payment franchise.

The analysts emphasized that PayPal’s Braintree merchant infrastructure could significantly enhance Stripe’s competitive positioning against payments processor rival Adyen. Braintree would add approximately $700 billion in total payment volume (TPV) to Stripe’s existing scale, a material increase given that Stripe’s customers generated $1.9 trillion in TPV last year.

PayPal’s large user base of approximately 434 million active accounts and its extensive merchant network would provide Stripe with immediate access to consumer payment flows that complement its existing business-focused infrastructure. This combination would position the merged entity across both the consumer and merchant sides of digital payments, potentially creating a comprehensive payments ecosystem.

Crypto and Stablecoin Capabilities

Both companies have established significant presences in the cryptocurrency and stablecoin sectors, which analysts suggest could create additional synergies in a combined entity. Stripe acquired stablecoin platform Bridge in 2025 and has also purchased crypto startup Privy, while actively adding stablecoin payment capabilities to its infrastructure.

PayPal launched its own dollar-pegged stablecoin, PYUSD, in August 2023 through a partnership with Paxos, becoming one of the first major fintech companies to issue its own token. The company has continued to develop its crypto offerings, integrating digital asset capabilities across its payment platforms.

A combined entity could potentially leverage both companies’ crypto capabilities to develop more advanced digital payment solutions.

PayPal’s Recent Challenges and Management Changes

PayPal has faced significant headwinds in recent years, including slowing payment volume growth, margin compression, and intensified competition from both traditional financial institutions and newer fintech entrants. The company’s stock has lost more than 40% of its value over the past year, reflecting investor concerns about its growth trajectory.

The company recently announced management changes, with former board chair Enrique Lores scheduled to assume the role of president and CEO on March 1, 2026, replacing Alex Chriss, who was removed from the position earlier this month. David Dorman will take over as board chair. PayPal’s fourth-quarter earnings and revenue both fell short of analyst expectations, and payment transaction growth continued to decelerate.

PayPal reported full-year 2025 revenue of approximately $33.2 billion and net income of $5.23 billion, representing modest growth but reflecting the competitive pressures facing the company. The company’s current valuation multiple of roughly 8x earnings stands well below historical levels and compares unfavorably to payment peers, reflecting the market’s concerns about its long-term prospects.

Industry Context and Deal Feasibility

A potential combination of Stripe and PayPal would represent one of the largest and most consequential transactions in the global payments industry, bringing together two companies with complementary strengths in business-to-business and consumer payments.

From a financial perspective, the significant gap between Stripe’s $159 billion valuation and PayPal’s $43 billion market capitalization makes various transaction structures possible, including Stripe acquiring PayPal outright using a combination of cash and equity, or pursuing a partial acquisition of specific business units such as Braintree or Venmo.

However, substantial hurdles remain. As a privately held company, Stripe would need to arrange significant financing for any acquisition, potentially including new equity raises or debt financing. Regulatory review would also be extensive given the combined entity’s scale and market position in digital payments.

Stripe co-founders Patrick and John Collison have not prioritized taking the company public, recently stating that an initial public offering is not on their list of near-term priorities. Acquiring a public company like PayPal would represent a significant strategic shift for the firm.

FAQ: Understanding the Potential Stripe-PayPal Deal

Q: What is the status of Stripe’s potential acquisition of PayPal?

A: Discussions are in very early stages, according to sources familiar with the matter. Stripe has expressed preliminary interest in acquiring all or parts of PayPal, but no formal offer has been made and there is no guarantee a transaction will ultimately occur.

Q: Why would Stripe want to acquire PayPal?

A: Strategic benefits include gaining consumer-facing brands including PayPal and Venmo to complement Stripe’s business-to-business focus, acquiring Braintree’s merchant infrastructure which would add approximately $700 billion in payment volume, and combining both companies’ crypto and stablecoin capabilities.

Q: How do the companies’ valuations compare?

A: Stripe’s latest valuation from a February 2026 tender offer is approximately $159 billion, while PayPal’s market capitalization stands at roughly $43 billion as of late February 2026.

Q: What role do cryptocurrency and stablecoins play in the potential deal?

A: Both companies have significant crypto operations—Stripe acquired stablecoin platform Bridge and has integrated stablecoin payments, while PayPal launched its own PYUSD stablecoin. A combined entity could become a stronger player in digital asset payments.

Q: What challenges could prevent a deal from happening?

A: Major hurdles include financing requirements for privately held Stripe, extensive regulatory review given the combined scale, potential antitrust concerns, and integration challenges between two large payments platforms. The discussions remain preliminary and may not result in a transaction.