Stripe rises, PayPal falls: The new king of payments ascends

Original｜Odaily Planet Daily（@OdailyChina）

Author｜Wenser（@wenser 2010）

On February 24, 2026, the global payments industry saw two highly milestone-worthy “turning-point events”:

First, Stripe announced that it completed a new round of tender offer acquisitions at a $159 billion valuation. Institutions including Thrive Capital, Coatue, and a16z jointly invested, and the valuation jumped 74% from $91.5 billion a year earlier. That day, Stripe’s two co-founders Patrick and John Collison released their 2025 annual open letter, reviewing Stripe’s $1.9 trillion in annual transaction volume on its platform—up 34% year over year, representing about 1.6% of global GDP.

Second, there is the latest development from “the old payment titan” PayPal: according to a report by Bloomberg, PayPal is in contact with potential acquirers, with at least one major competitor evaluating the deal. Once the news broke, PayPal’s share price surged by 9.7% at one point during the day, closed up by about 5.76%, becoming the top gainer stock of the day in the S&P 500 (Odaily Planet Daily Note: even though all three major indexes fell that day).

Worth savoring is that, according to Bloomberg’s subsequent report, Stripe is considering acquiring all or part of PayPal’s business. Interesting, right? The upside for the former lies in the valuation surge; and the upside for the latter is: “finally, someone with deep pockets is willing to buy me.”

This is not just a sidestory of two payment giants—it’s more like a line dividing “who has seen the next era.”

Stripe’s Infinite Game: An “Internet of Money” Operating System

If your understanding of Stripe is still stuck at “a company that does a payments API,” then you’re at least three years behind.

Looking back at Stripe’s 2025 business revenue, its achievements are evident to all. 90% of companies in the Dow and 80% of companies in the Nasdaq 100 use Stripe; almost all leading AI companies—OpenAI (ChatGPT), Anthropic (Claude), Cursor, Midjourney—use Stripe for their payment infrastructure. In Delaware, known as “the heartland of U.S. innovation,” 25% of new registered companies are founded through Stripe Atlas (Odaily Planet Daily Note: a 2B company registration service platform). In 2025, 20% of Atlas startups completed their first charge within 30 days of incorporation—this figure is only 8% over a 5-year period.

The key driving force behind the above results is undoubtedly Stripe’s deep布局 in the business line of crypto payments and on-chain finance.

In their open long letter, the Collison brothers wrote a sentence that forces the entire payments industry—and even the crypto market—to think deeply: “Perhaps we’ve entered a crypto winter already, but it’s definitely the summer of stablecoins.” The data backs up this judgment—In 2025, Bitcoin’s price fell by about 50% from its peak, yet stablecoin transaction volume reached an unprecedented $3.4 trillion. Payments volume doubled to about $400 billion, of which around 60% came from B2B payment scenarios.

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

Before this turning point arrived, Stripe had already placed a heavy bet:

In October 2024, it acquired the stablecoin infrastructure company Bridge for about $1.1 billion—the largest single acquisition in the company’s history. After the acquisition, Bridge’s transaction volume increased by more than 4x; in July 2025, it acquired the crypto wallet infrastructure company Privy, which supports more than 110 million programmable wallets;

In September 2025, it co-fostered the Layer 1 blockchain Tempo, built specifically for payments. In March 2026, the mainnet goes live and supports over 100k TPS, with sub-second settlement. Visa, Shopify, Mastercard, Anthropic, OpenAI, Revolut, and others have already integrated.

That’s how Stripe built its own stablecoin ecosystem: stablecoin back-end infrastructure Bridge, wallet front-end applications Privy, and the underlying settlement system Tempo—these three interweave across the stablecoin issuance, custody, and settlement end-to-end closed-loop ecosystem.

Looking further ahead: Stripe is also co-developing with OpenAI the Agent Commerce Protocol (ACP) and launching Machine Payments—letting developers charge API call fees directly to AI Agents for payment settlement through stablecoin micro-payments. This is a payment scenario that has never existed before. Stripe’s assessment is straightforward: When AI Agents start making purchase decisions on behalf of humans, whoever controls the payment rails will seize the core lifeline of the AI economy first.

Stripe’s Forward-Looking Vision: Borrowing the Entire Payments Industry’s Homework

Just look at what their peers are doing to see how far ahead Stripe’s positioning is.

In March 2026, Mastercard announced it would acquire stablecoin infrastructure company BVNK for up to $1.8 billion—this is Mastercard’s largest acquisition in the digital assets space to date. Mastercard’s chief product officer Jorn Lambert put it plainly: “We expect that, over time, most financial institutions and fintech companies will provide digital currency services.”

Take note of the wording—“will provide.” And Stripe is already providing them—and has been providing them for a full year and a half. The stablecoin infrastructure turf war has a timeline laid out here:

October 2024: Stripe acquires Bridge;

May 2025: Visa makes a strategic investment in BVNK;

In 2025: Coinbase opens talks to acquire BVNK for about $2.0 billion, but the negotiations ultimately fall apart;

March 2026: Mastercard takes over BVNK for $1.8 billion. The entire traditional payments industry is only starting to scramble to fill this “missing ticket” in 2026—while Stripe already bought its ticket back in 2024.

There’s also an industry anecdote: Airwallex (Airwallex in the sky cloud exchange) founder Jack Zhang **** previously revealed **** that as early as 2018, Stripe tried to acquire Airwallex with a $1.2 billion offer—back then, Airwallex’s annual revenue was only about $2 million, implying a valuation of roughly 600x revenue. This means that in cross-border payments, Stripe had already spotted something others hadn’t seen yet back in 2018.

True foresight is never a single correct judgment; it’s a continuous ability to perceive trends.

PayPal’s Old-Day Dilemma: When the Old Titan Gets Lost in the New Age of Sailing

Now let’s look at PayPal.

In one sentence, here’s the backstory of how this former giant built its fortune: in 1998, PayPal was born in the golden era before that dot-com bubble had fully burst. It quickly became the default payment standard for eBay’s e-commerce, and a cornerstone of early internet finance. But the more glorious the history, the more brutal the present reality becomes: PayPal is losing momentum across the board—and the spot it’s losing momentum is exactly where it once took most pride.

For the full year 2025, PayPal net revenue was $33.2 billion, with growth of only 4.3%, down from 6.8% in 2024 and continuing to slide. Core direct checkout business grew by only 4% for the year, dropping to 1% in Q4, down from 7% a year earlier in a steep fall. Behind that number is the comprehensive erosion of PayPal’s core turf by Apple Pay, Google Pay, Stripe, and Adyen. In Q4, active accounts saw a 5% year-over-year decline in the number of transactions; the total number of active accounts hovered around 439 million.

In February 2026, after the Q4 earnings release, the stock price plunged more than 20% in a single day. CEO Alex Chriss then left, and on March 1, the new CEO Enrique Lores took over. The management’s remarks on the call were: “Our execution has not reached the level it should.”

PYUSD was PayPal’s biggest bet to enter the on-chain world, but reality slapped it hard: launched in August 2023, its current market cap is still under $4.0 billion, with a market share below 0.5%—nearly negligible in the face of USDT and USDC. Even USD1, a latecomer, still can’t compare.

Only recently, nearly three years later, PayPal expanded PYUSD to roughly 70 markets worldwide. The move itself isn’t wrong, but when competitors have already been charging full speed on the track for nearly two years, the advantage of running early is now meaningless.

More fatally, what lies behind PayPal’s “woke up early and arrived late” reflects a fundamental contradiction hidden beneath its surface business: PayPal’s business model lives on “fees from money flow,” while the stablecoin business model relies on “parking assets to earn U.S. Treasury interest.” There’s a natural conflict between these two logics—each time PayPal promotes a PYUSD stablecoin payment, to some extent it’s also cannibalizing its traditional fee income.

With PayPal’s current business framework, it’s hard to solve this problem.

The Clash of “Payments Kings” (Old vs. New): Who Builds New Infrastructure, Who Repairs Old Pipelines?

Putting the two companies side by side, the branching point of fate isn’t in any single product decision—it’s in the answer to the question of “what the next step for payments is.”

PayPal’s answer is to make existing payment services even better. Monetizing Venmo, the BNPL business, and PYUSD expansion—these moves themselves aren’t wrong, but they are all patchwork within the existing framework, not a bet on the next paradigm.

When stablecoins appeared, PayPal responded with: “let’s issue a stablecoin too.” And when the AI wave came, PayPal responded with: “add a more convenient and faster button on the checkout page.”

Out of sight, out of mind. PayPal’s setback may already be doomed by management’s and the company’s choice to play it safe rather than pursue disruptive innovation.

By contrast, Stripe has never been confined by existing standard answers; instead, it has always been searching for better solutions.

To the question of “the future state of payments,” Stripe’s answer is to redefine payments itself: starting from collecting payments with seven lines of code, it builds all the way to stablecoin orchestration (Bridge), crypto wallets (Privy), a payment-dedicated blockchain (Tempo), and the AI agent commerce protocol (ACP). Each step isn’t about grabbing market share in existing payments, but about laying the foundation for the next financial and payments era.

In their public 2025 annual summary letter, the Collison brothers wrote: “Our best guess is that the acceleration in 2025 marked the start of an even bigger inflection point in entrepreneurship and creativity driven by large language models.”

Behind this sentence is a clear judgment: the business they operate has never been just a payments company—it’s laying the financial foundation for the next internet era.

In their view, the entire industry will eventually move toward on-chain payments, stablecoin settlement, and the AI Agent economy, and there’s not much dispute about that anymore. The only difference is: who is building this road, and who waits until the road is built before stepping on it.

Stripe chose the former—and did so nearly two years earlier than peers. PayPal’s current situation is a company with massive scale, healthy cash flow, but lagging half a step behind on the direction of the times. It may still have comeback cards, but its time window is narrowing.

Of course, we must acknowledge that PayPal isn’t a “bad company.” It has 439 million active accounts, Venmo’s social payments DNA, nearly a $2 trillion annual transaction scale, and a business model that is still generating real cash flow. But in the new payments era, these assets look more like a set of cards that need to be reactivated—not an unassailable moat.

Historically, every time a technological paradigm shifts, a large group of “obvious giants” are swept into the dust of history. What PayPal is facing now is exactly such an exam question that must be answered: do you continue being a PayPal that seems better but is actually stuck in place, or do you be bold and strive to become the payment infrastructure of the next era?

The answer decides your fate.

Recommended Reading:

Stripe 2025 annual open letter (official full text)

Stripe official press release: tender offer acquisition and annual update

Stripe is building the Tempo blockchain

Stripe is considering acquiring PayPal

Mastercard to acquire BVNK for up to $1.8 billion

PayPal Q4 2025 earnings report, CEO departure

PayPal 2025 performance deep analysis

Airwallex founder discloses that he rejected Stripe’s $1.2 billion acquisition offer

Mastercard proposes to acquire BVNK for up to $1.8 billion