Stripe's valuation exceeds $159 billion as PayPal faces acquisition rumors.

Original | Odaily Planet Daily (@OdailyChina)

Author | Wenser (@wenser 2010)

On February 24, 2026, the global payments industry witnessed two landmark "turning points":

First, Stripe announced a new tender offer at a $159 billion valuation, with joint investments from institutions including Thrive Capital, Coatue, and a16z—representing a 74% increase from its $91.5 billion valuation a year ago. On the same day, Stripe’s co-founders, Patrick and John Collison, released their 2025 open letter, highlighting $1.9 trillion in annual transaction volume on the Stripe platform—a 34% year-over-year growth, accounting for approximately 1.6% of global GDP.

Second, the latest development from "the former payment giant," PayPal: According to Bloomberg, PayPal is in talks with potential acquirers, with at least one major competitor evaluating the acquisition. Upon the news, PayPal's stock surged as much as 9.7% intraday and closed up approximately 5.76%, becoming the top gainer on the S&P 500 that day (Odaily Planet Daily note: even though all three major indices declined that day).

Worth noting is that, according to subsequent reports from Bloomberg, Stripe is considering acquiring all or part of PayPal’s business. Interesting? The upside for the former lies in its soaring valuation; for the latter, it’s “finally, a big investor wants to buy me.”

This is not merely an anecdote in the story of two payment giants, but rather a dividing line over who saw the next era.

If your understanding of Stripe still stops at "a company that provides payment processing APIs," you're at least three years behind.

Looking back at Stripe’s 2025 revenue performance, its achievements are undeniable: 90% of companies in the Dow Jones Industrial Average and 80% of companies in the Nasdaq 100 use Stripe; nearly all leading AI companies—OpenAI (ChatGPT), Anthropic (Claude), Cursor, Midjourney—rely on Stripe for their payment infrastructure; 25% of newly registered companies in Delaware, known as the “heartland of American innovation,” were founded through Stripe Atlas (Odaily Planet Daily Note: a B2B company registration platform); in 2025, 20% of Atlas-founded startups completed their first charge within 30 days of incorporation, up from just 8% five years ago.

The key driver behind these achievements is undoubtedly Stripe’s deep strategic positioning in the cryptocurrency payments and on-chain finance business line.

The Collison brothers wrote in an open letter a statement that has forced the entire payments industry and the crypto market to reflect: “We may now be in a crypto winter, but it is undoubtedly a summer for stablecoins.” Data confirms this assessment—in 2025, Bitcoin’s price dropped by approximately 50% from its peak, yet stablecoin trading volume reached an unprecedented $34 trillion; payment volume doubled to around $400 billion, with about 60% coming from B2B payment scenarios.

In reality, in 2025, the growth in stablecoin adoption data has become fully decoupled from the price volatility of crypto assets.

Stripe had already made a big bet before this turning point arrived:

In October 2024, it acquired Bridge, a stablecoin infrastructure company, for approximately $1.1 billion—the largest single acquisition in the company’s history—resulting in more than a fourfold increase in Bridge’s transaction volume; in July 2025, it acquired Privy, a cryptocurrency wallet infrastructure company that supports over 110 million programmable wallets;

In September 2025, it partnered with Paradigm to incubate Tempo, a Layer 1 blockchain built specifically for payments. The mainnet launched in March 2026, supporting over 100,000 TPS and sub-second settlement, with integrations already live from Visa, Shopify, Mastercard, Anthropic, OpenAI, and Revolut.

Thus, Stripe has built its own stablecoin ecosystem—Bridge, the stablecoin backend infrastructure; Privy, the wallet frontend application; and Tempo, the underlying settlement system—three components intricately interconnected, spanning the entire closed-loop ecosystem of stablecoin issuance, custody, and settlement.

Looking ahead: Stripe has partnered with OpenAI to develop the Agent Commerce Protocol (ACP), introducing Machine Payments—enabling developers to charge AI agents directly for API calls, settled via micro-payments in stablecoins. This is a payment scenario that has never existed before. Stripe’s reasoning is straightforward: when AI agents begin making purchasing decisions on behalf of humans, whoever controls the payment channel will be the first to seize the core lifeline of the AI economy.

The sophistication of Stripe’s layout is evident from what its competitors are doing.

In March 2026, Mastercard announced the acquisition of stablecoin infrastructure company BVNK for up to $1.8 billion, marking Mastercard’s largest-ever acquisition in the digital assets space. Mastercard’s Chief Product Officer, Jorn Lambert, stated plainly: “We expect that over time, most financial institutions and fintech companies will offer digital currency services.”

Note the phrase—"will provide." But Stripe has already been providing it—for a full year and a half. Here is the timeline for this race for stablecoin infrastructure:

In October 2024, Stripe acquired Bridge;

In May 2025, Visa made a strategic investment in BVNK;

In 2025, Coinbase made an offer of approximately $2 billion to negotiate the acquisition of BVNK, but the talks ultimately fell through;

In March 2026, Mastercard acquired BVNK for $1.8 billion. While the entire traditional payments industry only began scrambling to secure this opportunity in 2026, Stripe had already purchased it back in 2024.

Additionally, here’s an interesting industry anecdote: Airwallex’s founder, Jack Zhang, previously revealed that back in 2018, Stripe made a $1.2 billion offer to acquire Airwallex—at a time when Airwallex’s annual revenue was only about $2 million, resulting in a valuation roughly 600 times its revenue. This means that as early as 2018, Stripe had already recognized something others had yet to see in the cross-border payments space.

Foresight is never a single correct judgment, but rather a continuous ability to perceive trends.

Now let’s look at PayPal.

In one sentence, the rise of this former giant: Born in 1998 during the golden age before the dot-com bubble burst, PayPal quickly became the default payment method for eBay and a pioneer of internet finance. But the more glorious its history, the harsher its current reality: PayPal is now losing momentum—precisely in the very area it once prided itself on most.

In 2025, PayPal's net revenue reached $33.2 billion, growing at just 4.3%, down from 6.8% in 2024, continuing its downward trend. Core direct checkout revenue grew only 4% for the full year, plunging to 1% in Q4 from 7% a year earlier—a sharp decline driven by comprehensive encroachment from Apple Pay, Google Pay, Stripe, and Adyen on PayPal’s core territory. Average transactions per active account in Q4 fell 5% year-over-year, while total active accounts remained stagnant at around 439 million.

In February 2026, after the Q4 earnings report, the stock price dropped more than 20% in a single day; CEO Alex Chriss subsequently resigned, and new CEO Enrique Lores took over on March 1. During the earnings call, management stated: “Our execution has not met the expected level.”

PYUSD, once PayPal’s biggest bet on entering the on-chain world, has been harshly confronted by reality: launched in August 2023, its current market cap is under $4 billion, with a market share of less than 0.5%, making it nearly negligible compared to USDT and USDC—even falling behind newer entrants like USD1.

Until recently, after nearly three years, PayPal expanded PYUSD to approximately 70 markets worldwide—this move itself was sound, but in a race where competitors have been racing ahead for nearly two years, the first-mover advantage is now meaningless.

More fatally, PayPal’s “started early but arrived late” situation reveals a fundamental contradiction beneath its surface business: PayPal’s business model relies on transaction fees from fund flows, while stablecoins depend on earning interest from government bonds on idle assets. These two models are inherently conflicting—every time PayPal promotes a PYUSD stablecoin payment, it is, to some extent, eroding its own traditional fee income.

This question is difficult to solve within PayPal's existing business framework.

When viewed together, the turning point in the two companies’ fates was not a single product decision, but rather the radically different answers they gave to the question: “What is the next step for payments?”

PayPal’s answer is to improve its existing payment services. Monetizing Venmo, expanding BNPL, and growing PYUSD are not inherently problematic—but they are all patches within the current framework, not bets on the next paradigm.

When stablecoins emerged, PayPal’s response was, “Let’s issue our own stablecoin”; but when the AI wave arrived, PayPal’s response was, “Let’s add a more convenient and faster button on the checkout page.”

A single leaf blocking the view, unable to see Mount Tai. PayPal’s disappointment was perhaps already inevitable when its management and the entire company chose to maintain the status quo rather than pursue disruptive innovation.

In contrast, Stripe has never been confined by existing standard solutions, but has consistently sought better ones.

In response to the question of “the future of payments,” Stripe’s answer is to redefine payments itself: starting with accepting payments in seven lines of code, it has built its way up to stablecoin orchestration (Bridge), crypto wallets (Privy), a payment-specific blockchain (Tempo), and AI agent commerce protocols (ACP)—each step not aimed at capturing market share from existing payment systems, but at laying the foundation for the next era of finance and payments.

The Collison brothers wrote in the 2025 Annual Letter: “Our best guess is that the acceleration in 2025 marks the beginning of a larger inflection point in entrepreneurship and creativity driven by large language models.”

Behind this statement is a clear and discerning judgment—they have never operated merely a payment company, but are laying the financial foundation for the next era of the internet.

In their view, the entire industry will ultimately move toward on-chain payments, stablecoin settlements, and AI agent economies—this is now largely uncontested. The only difference lies in who is building this road and who is waiting for it to be completed before joining.

Stripe chose the former, nearly two years ahead of its peers. PayPal now finds itself as a large company with healthy cash flow, but lagging behind current trends—it still has cards to play, but its window of opportunity is narrowing.

Of course, we must acknowledge that PayPal is not a "bad company"—it has 4.39 billion active accounts, Venmo’s social payment DNA, annual transaction volumes approaching $2 trillion, and a business model that still generates real cash flow. But in the new payments era, these assets are less like an impregnable moat and more like a hand of cards that needs to be reactivated.

Throughout history, every shift in technological paradigm has swept away a host of “obvious giants” into the dustbin of history. PayPal now faces this very question it must answer: Will you remain a PayPal that seems better but is in fact stagnant, or will you boldly advance and strive to become the payment infrastructure of the next era?

Answers determine destiny.

Recommended reading:

Stripe 2025 Annual Letter (Official Original)

Stripe official press release: Tender offer and annual update

Stripe is building the Tempo blockchain.

Stripe is considering acquiring PayPal

Mastercard is acquiring BVNK for up to $1.8 billion

PayPal Q4 2025 earnings report, CEO departs

In-depth Analysis of PayPal's 2025 Performance

Airwallex founder reveals previously declined $1.2 billion acquisition offer from Stripe

Mastercard plans to acquire BVNK for up to $1.8 billion