Just five years ago, PayPal was one of Wall Street’s favorites and the leader of the digital payments market. Today, the company finds itself in an entirely different position — its stock value has dropped sharply, Apple Pay now dominates the U.S. market, and PayPal is reportedly considering an unsolicited acquisition offer.
Last week, it emerged that competitor Stripe, together with investment firm Advent International, submitted a $53 billion offer to acquire PayPal outright.
According to sources, PayPal’s board of directors is reviewing the proposal, though a final decision is expected later.
From Market Leader to a Harder Reality
Founded in 1998, PayPal was one of the pioneers of e-commerce and online payments. The company was acquired by eBay in 2002 and spun off as an independent business in 2015.
Years of rapid growth pushed PayPal’s market capitalization to $360 billion in 2021.
Since then, however, the company’s growth has slowed, competition has intensified, and efforts to strengthen the business haven’t delivered the expected results.
The Company Admits It Fell Behind the Competition
In February 2026, PayPal appointed a new CEO and publicly acknowledged that the company needs to strengthen its position relative to competitors.
According to analysts, while Apple, Google, Samsung, Stripe, and others were rolling out new payment methods to consumers, PayPal responded relatively slowly to shifts in the market.
The company failed to capitalize on key areas, including:
- Digital banking
- The evolution of mobile payments
- New e-commerce services
As a result, despite having existed before the iPhone even launched, by 2025 Apple Pay’s share of the U.S. market had already surpassed PayPal’s by 10 percentage points.
AI Is Also Cited as a Reason for the Decline
PayPal also fell behind competitors on artificial intelligence. The company entered the development of so-called agentic commerce — a model in which AI agents select, approve, and complete purchases on a user’s behalf — relatively late.
PayPal’s user base has essentially stopped growing, which has made extracting more revenue from existing customers the company’s central challenge.
According to sources, PayPal’s board does not consider the $53 billion offer sufficient, and has not yet agreed on whether it’s worth formally entering negotiations. Analysts believe Stripe and Advent International have the financial capacity to offer more.
