Stripe Ascends, PayPal Declines: The New King of Payments Rises

Author｜Wenser (@वेन्सर 2010)

On February 24, 2026, the global payments industry witnessed two landmark “pivotal events”:

First, Stripe announced a new tender offer completed at a valuation of $159 billion, with institutions like Thrive Capital, Coatue, and a16z participating, marking a staggering 74% surge from its $91.5 billion valuation a year prior. On the same day, Stripe’s co-founders Patrick and John Collison released their 2025 annual letter, reviewing $1.9 trillion in annual transaction volume on the Stripe platform—a 34% year-over-year increase, accounting for approximately 1.6% of global GDP.

Second, came the latest news about the “former payments titan” PayPal: according to Bloomberg, PayPal is engaging with potential acquirers, with at least one major competitor evaluating a takeover. Upon the news, PayPal’s stock price soared intraday by 9.7%, closing up about 5.76%, making it the top gainer in the S&P 500 that day (Odaily Note: even as the three major indices all declined).

It’s worth noting that, according to subsequent Bloomberg reports, Stripe is considering acquiring all or part of PayPal’s business. Interesting, isn’t it? The former’s positive news stems from a valuation surge; the latter’s, from “finally having a major suitor willing to buy me.”

This is not merely an anecdote about two payments giants, but more like a dividing line about “who sees the next era.”

Stripe’s Infinite Game: The Operating System for the “Internet of Money”

If your understanding of Stripe is still stuck at “a company that makes payment APIs,” you’re at least three years behind.

Looking back at Stripe’s 2025 business revenue, its achievements are evident: 90% of companies in the Dow Jones and 80% in the Nasdaq 100 use Stripe; almost all leading AI companies—OpenAI (ChatGPT), Anthropic (Claude), Cursor, Midjourney—rely on Stripe for their payment infrastructure; in Delaware, known as the “heart of American innovation,” 25% of newly registered companies are created through Stripe Atlas (Odaily Note: a B2B company registration service platform), and in 2025, 20% of Atlas startups completed their first charge within 30 days of incorporation, compared to just 8% five years ago.

The key driver behind these achievements is undoubtedly Stripe’s deep strategic moves in क्रिप्टो payments and on-chain finance.

The Collison brothers wrote a line in their public letter that gave the entire payments industry and क्रिप्टो market pause for thought: “It may be crypto winter now, but it is absolutely stablecoin summer.” Data supports this judgment—in 2025, Bitcoin’s price fell about 50% from its peak, but stablecoin trading volume reached an unprecedented $34 trillion; payment volume doubled to approximately $400 billion, with about 60% coming from B2B payment scenarios.

The reality is that in 2025, the growth in stablecoin adoption data officially decoupled from crypto asset price volatility.

Stripe placed a heavy bet before this inflection point arrived:

In October 2024, it acquired stablecoin infrastructure company Bridge for approximately $1.1 billion, its largest single acquisition ever, after which Bridge’s transaction volume saw over 4x growth; in July 2025, it acquired crypto wallet infrastructure company Privy, which supports over 110 million programmable wallets;

In September 2025, it co-incubated Tempo, a Layer 1 blockchain built for payments, with Paradigm, with its mainnet officially launching in March 2026, supporting over 100,000 TPS, sub-second settlement, and integration with Visa, Shopify, Mastercard, Anthropic, OpenAI, Revolut, and others.

Thus, Stripe built its own stablecoin ecosystem—stablecoin backend infrastructure Bridge, wallet frontend application Privy, and underlying settlement system Tempo—intertwining across the stablecoin issuance, custody, and settlement closed-loop ecosystem.

Looking further ahead: Stripe also co-developed the Agent Commerce Protocol (ACP) with OpenAI, launching Machine Payments—allowing developers to charge AI Agents directly for API calls, settled via stablecoin micropayments. This is a payment scenario that never existed before. Stripe’s judgment is direct: when AI Agents start making purchasing decisions for humans, whoever controls the payment channel seizes the core lifeline of the AI economy first.

Stripe’s Foresight: Letting the Entire Payments Industry Copy Its Homework

How far ahead Stripe’s strategy is can be seen from its peers’ actions.

In March 2026, Mastercard announced acquiring stablecoin infrastructure company BVNK for up to $1.8 billion, Mastercard’s largest acquisition ever in the digital asset space. Mastercard’s Chief Product Officer Jorn Lambert was frank: “We expect that, over time, most financial institutions and fintechs will offer digital currency services.”

Note the phrase—”will offer.” Stripe has already been offering them, and for a full year and a half. The timeline for this battle over stablecoin infrastructure is clear:

October 2024: Stripe acquires Bridge;

May 2025: Visa makes a strategic investment in BVNK;

2025: Coinbase negotiates to acquire BVNK for about $2 billion, but talks ultimately collapse;

March 2026: Mastercard takes over BVNK for $1.8 billion. The ticket the entire traditional payments industry is scrambling to buy in 2026, Stripe had already purchased in 2024.

Additionally, there’s an interesting industry anecdote: Airwallex founder Jack Zhang previously revealed that as early as 2018, Stripe attempted to acquire Airwallex with a $1.2 billion offer—at that time, Airwallex’s annual revenue was only about $2 million, implying a valuation roughly 600 times its revenue. This means that in cross-border payments, Stripe saw something others hadn’t as far back as 2018.

Foresight is never a single correct judgment, but a sustained ability to perceive trends.

PayPal’s Old Dilemma: When a Former Titan Gets Lost in a New Age of Navigation

Now, let’s look at PayPal.

To summarize the rise of this former giant in one sentence: Born in 1998 during the golden age before the dot-com bubble burst, PayPal quickly became the default payment method for eBay e-commerce and an early pioneer of internet finance. But the more glorious the history, the harsher the contrast with the present reality: PayPal is decelerating across the board, precisely in areas where it once took the most pride.

For the full year 2025, PayPal’s net revenue was $33.2 billion, growing only 4.3%, lower than 2024’s 6.8%, continuing its decline. Its core direct checkout business grew only 4% for the year, dropping to 1% in Q4—a cliff-like fall from 7% a year ago. Behind this number lies the comprehensive erosion of PayPal’s core territory by Apple Pay, Google Pay, Stripe, and Adyen. Transactions per active account in Q4 fell 5% year-over-year, and the total number of active accounts stagnated around 439 million.

In February 2026, after the Q4 earnings release, the stock price plunged over 20% in a single day. CEO Alex Chriss subsequently stepped down, with new CEO Enrique Lores taking over on March 1. Management’s statement on the earnings call was: “Our execution has not been at the level it should be.”

The PYUSD card was once PayPal’s biggest bet to enter the on-chain world, but reality dealt it a harsh blow: launched in August 2023, its current market cap is less than $4 billion, with a market share under 0.5%, almost negligible compared to USDT and USDC, and even surpassed by the later entrant USD1.

Only recently, after nearly 3 years, has PayPal expanded PYUSD to about 70 markets globally—this move itself isn’t wrong, but on a track where competitors have been racing ahead for nearly two years, the first-mover advantage has become meaningless.

More critically, behind PayPal’s “early start but late arrival” lies a fundamental contradiction beneath its surface business: PayPal’s business model relies on “transaction fees from fund flows,” while the stablecoin business model relies on “earning treasury interest on deposited assets.” There is a natural conflict between these two logics—every time PayPal promotes a PYUSD stablecoin payment, it is, to some extent, cannibalizing its own traditional fee revenue.

This is a problem difficult to solve within PayPal’s existing business framework.

The Battle of Old vs. New “Payments Kings”: Who’s Building New Infrastructure, Who’s Repairing Old Pipes?

Looking at the two companies together, the fork in their fate lies not in a single product decision, but in the starkly different answers they gave to the question: “What is the next step for payments?”

PayPal’s answer is to make its existing payment services better. Monetizing Venmo, BNPL business, PYUSD expansion—these moves aren’t problematic in themselves, but they are patches within the existing framework, not bets on the next paradigm.

When stablecoins emerged, PayPal’s reaction was “let’s issue a stablecoin too”; when the AI wave arrived, PayPal’s reaction was “add a more convenient button on the checkout page.”

Failing to see the forest for the trees. PayPal’s decline was perhaps destined when its management and the entire company chose to defend its turf rather than pursue disruptive innovation.

In contrast, Stripe has never confined itself to existing standard answers, instead persistently seeking better solutions.

Faced with the proposition of “the future state of payments,” Stripe’s answer is to redefine payment itself: starting from seven lines of code for payments, it has built all the way to stablecoin orchestration (Bridge), crypto wallets (Privy), a payments-dedicated blockchain (Tempo), and the AI Agent Commerce Protocol (ACP)—each step is not about grabbing market share in the existing payments market, but about laying the foundation for the next era of finance and payments.

The Collison brothers wrote in their 2025 annual letter: “Our best guess is that the acceleration in 2025 is the beginning of a larger inflection in entrepreneurship and creativity driven by large language models.”

Behind this statement lies a clear-sighted judgment—they are not merely operating a payments company, but laying the financial groundwork for the next internet era.

In their view, the entire industry will eventually move towards on-chain payments, stablecoin settlement, and the AI Agent economy—this point is hardly debatable anymore. The difference lies only in: who is building this road, and who is waiting for the road to be built before getting on it.

Stripe chose the former, and did so nearly two years ahead of its peers. PayPal’s current situation is that of a company with massive scale, healthy cash flow, but half a step behind the trend of the times—it’s not without cards to play, but the time window left for it is narrowing.

Of course, we must acknowledge that PayPal is not a “bad company.” It boasts 439 million active accounts, Venmo’s social payments DNA, nearly $2 trillion in annual transaction volume, and a business model that still generates real cash flow. But in the new payments era, these assets are more like a hand that needs to be reactivated, not an impregnable moat.

Every technological paradigm shift in history has swept a large number of “taken-for-granted giants” into the dustbin of history. The question PayPal now faces is precisely such a test it must answer: Will you continue to be a seemingly better, but actually complacent and stagnant PayPal, or will you forge ahead, determined to become the payments infrastructure for the next era?

The answer determines fate.

Recommended Reading:

Stripe 2025 Annual Letter (Official)

Stripe Official Press Release: Tender Offer & Annual Update

Stripe is Building the Tempo Blockchain

Stripe Considering Acquiring PayPal

Mastercard to Acquire BVNK for Up to $1.8 Billion

PayPal Q4 2025 Earnings, CEO Departure

In-depth Analysis of PayPal’s 2025 Performance

Airwallex Founder Reveals Rejecting $1.2 Billion Stripe Acquisition

Mastercard Plans to Acquire BVNK for Up to $1.8 Billion

यह लेख इंटरनेट से लिया गया है: Stripe Ascends, PayPal Declines: The New King of Payments Rises

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