Shares of PayPal (NASDAQ:PYPL) took a nice bounce this week following the news that Stripe and Advent are working on a deal to acquire the global payments firm. In the past week, PayPal shares moved up by over 25%, suggesting that markets see a deal as likely and that the bid could go higher. The chatter indicates that the two sides are meeting next week to hash things out.
While Stripe will benefit by bringing in consumer payments, Venmo, and other services like PayPal’s credit offerings, some see it as a potential milestone for crypto adoption.
Stripe already offers stablecoin services for payments, mainly using USDC on various blockchains. It also supports crypto purchase or onramps to the cryptosphere. PayPal is also growing its digital asset side of the business, supporting major cryptocurrencies while issuing its own stablecoin, PYUSD, in partnership with Paxos. PYUSD is available in dozens of countries.
Radi El Haj, CEO at RS2, says that if the acquisition is completed, it will be one of the most consequential developments for crypto adoption within the payments sector – even if the deal is not predicated on crypto services.
“Stripe has been building substantial crypto infrastructure for several years, most notably through its $1.1 billion acquisition of stablecoin platform Bridge. PayPal, meanwhile, has its own stablecoin, PYUSD, and a large existing base of consumers with access to crypto services. Bringing those capabilities together with PayPal’s scale, more than 400 million active accounts, could create a genuine route towards mainstream crypto payments, rather than simply facilitating crypto speculation,” explains EL Haj.
He notes that stablecoin infrastructure is only as beneficial as the number of merchants and consumers willing to use it. A combination of Stripe and PayPal could boost that number, significantly increasing stablecoin and crypto usage.
“That said, the risks are real. Integrating two very different crypto strategies and compliance frameworks across dozens of jurisdictions would not be straightforward, and regulators would be likely to scrutinize a transaction of this scale closely,” predicts El Haj. “Consumer trust in crypto payments must also be earned at the point of checkout, rather than assumed. The opportunity is significant, but execution, not ambition, would determine whether a deal ultimately moved the needle on adoption.”
Still, markets like the pitch. PayPal has been struggling in recent years as competition has grown. Its lack of direction and stumbles within the political realm could benefit from new leadership and a renewed mission. Stripe is incredibly popular and remains private. A Stripe/PayPal marriage could be one for the digital asset history books.