PayPal's Ecosystem Expansion: Will Partnerships Boost Profitability?

PayPal Holdings PYPL recently partnered with Logicbroker, allowing thousands of Logicbroker’s merchants to seamlessly activate PayPal’s agentic commerce services, including store sync and future agentic payment capabilities. This makes their catalogs instantly accessible across leading AI shopping channels.

PayPal and OpenAI have formed a strategic partnership to enable seamless payments and agentic commerce experiences directly within ChatGPT. The partnership integrates PayPal’s digital wallet and its merchant network with OpenAI’s Instant Checkout. With this, ChatGPT users will be able to move from product discovery to secure, in-chat checkout in just a few taps.

PayPal’s Venmo has joined hands with Bilt to expand how people use Venmo for everyday payments. Starting in early 2026, Bilt members will be able to pay their rent and mortgage, and shop at Bilt neighbourhood merchants, earning rewards along the way. Venmo’s in-app commerce strategy will be added to Bilt's existing payment options of ACH, debit, and any linked credit card.

PayPal and Google have entered into a multi-year partnership to revolutionize agentic commerce experiences. PayPal integrates its branded checkout, Hyperwallet and Payouts solutions into Google products like Google Cloud, Google Ads, and Google Play. The partnership leverages Google's AI for improved security.

PayPal partners with major companies like Visa, Mastercard, Facebook, CaixaBank, HSBC, Barclays, JP Morgan and Bank of America. These partnerships help improve payment experiences for billions of users globally.

To conclude, these partnerships highlight PayPal’s focus on integrating AI-driven commerce, expanding global payment capabilities, and supporting merchant growth across key markets. By collaborating with major companies, PayPal strengthens its ecosystem and enhances global competitiveness in digital payments.

How Are PayPal’s Competitors Expanding?

Block Inc.’s XYZ Afterpay recently expanded through partnerships with fashion brands like Jenni Kayne, Thursday Boots, and Diesel, plus footwear brands Hibbett and Tecovas, and others in jewelry, home, and beauty sectors, ahead of the holiday season. Square partnered with Blackbird Bakery to integrate Square’s point-of-sale and Kitchen Display System. XYZ also joined forces with Grubhub to upgrade restaurants' food ordering ecosystem.

Affirm Holdings, Inc. AFRM deepened ties with Adyen for Buy Now Pay Later in Platforms and Canada, extended its Amazon partnership through 2031, and partnered with New York Life to purchase up to $750 million of AFRM’s installment loans. Additional partnerships include Google’s Agent Payments, Fanatics, ServiceTitan, Vagaro and Shopify.

PYPL’s Price Performance, Valuation & Estimates

Shares of PayPal have declined 28.3% year to date, underperforming both the broader industry and the S&P 500 Index.

From a valuation standpoint, PayPal shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 10.47X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 20.01X.

PayPal’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2025 EPS has been revised upward over the past two months. The Zacks Consensus Estimate for 2025 EPS suggests 14.8% growth year over year.

PayPal currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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