Collison brothers' Stripe expresses interest in acquiring PayPal

Reportedly exploring a potential acquisition of the digital payments pioneer, signalling a major industry shake-up.

Patrick and John Collison, founders of Stripe.

Payment processing firm Stripe is considering an acquisition of all or parts of PayPal, according to people familiar with the matter.

Stripe, which is closely held and is among the industry’s most valuable companies, has expressed preliminary interest in a potential acquisition of the digital payments pioneer or its assets, the people said, asking not to be identified because the matter is private.

The deliberations are early and there’s no certainty they’ll lead to a transaction, the people said. Representatives for Stripe and PayPal declined to comment.

PayPal closed up 6.7% to $47.01 in New York on Tuesday, giving it a market value of $43.3bn (€36.7bn).

Founded in the late 1990s, PayPal was an early mover in digital payments. It has since struggled with modernising its payment technologies as rivals such as Apple Inc. and Alphabet Inc. have seized market share.

Stripe, founded by Limerick brothers Patrick and John Collison, has become one of the industry’s most coveted players. Earlier Tuesday, Stripe announced it had reached a €135bn valuation in an employee tender offer.

“PayPal has had, obviously, a tough time over the past few years, and the landscape has changed quite a bit with Apple Pay and Google Pay and everything like that,” John Collison, Stripe’s president, said in an interview this week. “I can’t talk about any, you know, M&A hypotheticals, but they’ve definitely had a tough time.” 

PayPal’s current board chair, Enrique Lores, is due to take up his new role as president and chief executive officer on March 1, replacing Alex Chriss, who was ousted as CEO this month. The company’s fourth-quarter profit and revenue missed analysts’ estimates, according to results for the period that also showed a continued slowdown in payment volume.

Bloomberg