Why Stripe is willing to pay a 28% premium to acquire PayPal

Stripe and private equity firm Advent International have offered to acquire PayPal for nearly $60.50 per share, a 28% premium over Tuesday's close that values PayPal at more than $53 billion. With roughly $50 billion in committed bank financing backing the bid, the move confirms what insiders had telegraphed for months: Stripe sees strategic value in PayPal that the public markets have not, Chris Jones , managing director at PSE Consulting , told FinAi News . “This is a deal that's been rumored for months, and now it's moved a lot closer to reality,” Jones said. “If it lands, it would be one of the biggest moves the payments industry has seen in years — a fascinating combination of a consumer-facing giant in PayPal and a B2B-focused infrastructure powerhouse in Stripe.” [caption id="attachment_221958" align="alignright" width="300"] (Courtesy/Bloomberg Mercury)[/caption] Stripe would gain the industry's most successful consumer wallet, with 440 million active accounts and $1.8 trillion of payment volume in 2025, Jones said, adding that Stripe already is a major payment processing platform, with $1.9 trillion a year in transactions, or nearly 1.6% of global GDP. “From a transaction volume perspective, the combined group would handle some $3.7 trillion annually, putting it on a par with the newly combined Global Payments and Worldpay , the largest merchant acquirer in the world,” Jones said. “At $53 billion and a 28% premium, the price tag reflects just how much strategic value is on the table here.” There are challenges too, he warned. “The overlap between Stripe's core gateway business and PayPal's Braintree offering would need careful handling, as merchants are understandably nervous of platform migration,” Jones said. “There's also the task of injecting Stripe's renowned engineering culture into a large, complex product estate serving 440 million consumers at a pace that keeps both franchises moving forward.” PayPal’s struggles After its fourth-quarter 2025 earnings missed Wall Street revenue and profit expectations, and weak guidance that forecast a decline in adjusted profit, PayPal's shares plummeted. Enrique Lores replaced Alex Chriss as chief executive in March, tasked with a sweeping turnaround. On the Q1 2026 earnings call in May, Lores said PayPal would simplify in three areas — checkout solutions at PayPal, consumer financial services and Venmo, and payment services — and take a disciplined approach to prioritization, focusing on areas with the greatest potential to drive durable growth and shareholder value. He made no mention of a potential merger or acquisition. PayPal’s shares hit an all-time high of $300 in 2021 on the heels of cheap money in the economy due to the Federal Reserve ’s quantitative easing during the pandemic. The shares are down nearly 82% from that. Vulnerability PayPal's vulnerability to a bid was hiding in plain sight, according to Bank of America Securities research note on May 6. Following Q1 earnings maintained a ”neutral” rating and cut its price objective to $53, citing branded checkout growth of just 2% year over year, a declining take rate and a turnaround it characterized as "a multiyear process rather than a near-term event," the report stated The bank called PayPal "a show me story," noting that an upside depended on cost discipline and monetization efficiency rather than reacceleration in volume growth. PayPal’s shares jumped 18% in premarket trading today to $56, adding nearly $7 billion to its valuation and were trading at $54.94 as of 11:55 a.m. Stripe decline to comment for this story and PayPal didn’t respond to a request for comment. Shares of PayPal [NYSE: PYPL] were trading at $55 at market close today, up 17% from market open. PayPal has a market capitalization of $49 billion. Register here for the FinAi Lending Summit, set for Oct. 7-8 in Las Vegas.

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Why Stripe is willing to pay a 28% premium to acquire PayPal

PayPal stock jumped 18% in premarket to $56

Texas dealership group Autobahn automates back-end processes with AI

BNY writes 40% of software code with AI

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