Stripe just offered to buy PayPal.

Let me repeat that for the people in the back.

A company founded in 2010, still private, is trying to buy the company that invented online payments.If you had told someone this in 2018, they’d have asked what you were smoking and whether you had enough for 2 of you.

PayPal’s board is calling the offer inadequate. Stripe offered $60 per share and PayPal’s board thinks the company is worth $75–115 per share. Analysts are split. Prediction markets are pricing an acquisition before 2027 at around 80%. So basically everyone agrees on everything, as usual.

The most intriguing part for me isn’t the price. It’s what it tells us about FinTech and payments and where the industry is going.

Stripe and Advent would each own 50% of PayPal. The bid includes roughly $50 billion from JP Morgan and Morgan Stanley, plus $17 billion in equity. It would be the largest fintech acquisition in history, and a rare case of a private company (not a bank) buying a public pioneer (and, technically, a bank, which makes the whole thing even funnier).

Again, a reminder for the people in the back: PayPal traded at $310 a share in 2021, during the lockdown shopping spree, when we all bought air fryers and standing desks we never assembled.

Since then PayPal has been in a series of constant turnarounds and restructurings.

What is the deal?

This is not a takeover. This is a distressed-asset purchase by the white knight on a white horse. Or a rescue mission disguised as M&A.

Why is Advent in the mix? Because Stripe’s people are not naive. A combined Stripe-PayPal would process roughly $3.7 trillion annually (about 3% of global GDP). The deal would trigger antitrust reviews in Europe (the Trump administration may not care, as long as they can place their anonymous bets on Polymarket in advance and collect their winnings), but Europeans will absolutely freak out. Freaking out about American tech companies is, after all, Europe’s most reliable export.

Advent, which has owned Worldpay, Vantiv, and Nuvei, is the pre-packaged remedy, because if regulators demand divestiture, Braintree, for example, can get carved out and parked with Advent’s existing payments portfolio.

• Stripe wants  retail customers and retail distribution. Stripe already built the best merchant infrastructure in the world, but they never cracked the consumer side. PayPal has 400+ million consumer accounts, Venmo, and a two-sided network Stripe cannot build organically.  With this infrastructure (plus added stablecoins settlements) the future company can entirely bypass card networks.
• If the deal becomes credible, you can safely assume Visa and Mastercard will not be sending congratulation flowers. They will be sending lobbyists. To Brussels. Business class.

How and why PayPal deteriorated

PayPal was founded by people who read financial regulation the way some people read the Bible: selectively, for inspiration, not literally, and mostly in search of loopholes. The early PayPal mafia (Thiel, Musk, Levchin, Sacks) focused on scaling online payments. They were aggressive, fast, and allergic to the ceremonies of banking. They built a monopoly around online checkout.

Then, over 15 years, that DNA was systematically lost and replaced. The executives who ran PayPal after the eBay spinoff came overwhelmingly from the card networks, especially from AMEX, and from traditional banking.

They brought with them the operating instincts of that world: protecting the franchise, adding fees and compliance layers, and treating every regulator interaction as existential. Imagine hiring museum curators to run a startup. The art is safe. Nothing new ever gets painted.

They also took merchants and business customers for granted and behaved as though merchants had nowhere to go. Then Stripe, Adyen, Shopify and others gave them somewhere to go. Turns out customers you abuse for a decade hold grudges. Who knew.The results were visible to anyone paying attention.

• The core PayPal product (checkout with PayPal) has not changed in a decade+ while Apple Pay, Google Pay, and other one-click checkouts ate conversion share. The response came years late. In tech years, that’s roughly three geological eras.
• Risk management within PayPal became customer abuse, especially for small merchants. Ask any small merchant about frozen funds, 180-day holds, and account terminations with no explanation and no appeal.
• PayPal de-risked itself into a company its core customers actively resented. The 2022 episode, when updated PayPal T&Cs threatened $2,500 fines for “misinformation” before being retracted as an “error,” was not an accident. It was the natural output of an increasingly risk-averse culture. Somewhere in that building, a policy team genuinely believed fining users for wrong thinking was normal.

PayPal did not fail because it was compliant. It failed because it was over-compliant in exactly the ways that don’t reduce risk: layers of processes, approvals, de-risking, all while assuming they still had a monopoly. Over-compliance is not safety. It is paying for a bodyguard who only guards you from your own customers.

What’s next?

• If this deal closes, it marks the beginning of the endgame for Western card-based payments. Stablecoins will replace card networks for good, because the settlement economics are too good (read “too cheap”) to ignore.
• Within 5 years, a meaningful share of cross-border B2B flows will move to stablecoin rails, and most users will never know or care. The war between PYUSD, USDC, USDT and SWIFT will be decided by distribution.
• Agentic commerce will rewrite checkout. When AI agents transact on your behalf, the “checkout button” stops existing. Payments become just APIs between agents. The winners will be whoever holds credentials, identity, and trusted authorization. This is Stripe’s home turf and PayPal’s nightmare, and both know it.
• Card networks will start buying their way into every alternative rail and settlement technology to save their interchange. I would not bet on them even if I were an insider. And if I were an insider, I would apparently be betting on Polymarket anyway.
• Europe will keep regulating and keep wondering why it has no industry champions. Digital IDs and the digital euro will consume enormous institutional energy for modest adoption, while the actual infrastructure decisions continue to be made in San Francisco. Europe will then call it strategic autonomy.
• And compliance remains the differentiator, in both directions.

PayPal is the case study of how over-compliance leads to decline. It will not be the last example. The company that once embodied moving fast in regulated markets is now the cautionary tale about what happens when you stop.

What do you think it means for FinTech? Are card networks next, or are they too big to fail?

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