PayPal's Agentic Commerce Expansion: Will it Boost Top-Line Growth?

PayPal Holdings PYPL announced a strategic partnership with Microsoft to power the rollout of Copilot Checkout in Copilot. This enables shoppers to discover, decide and pay entirely within the Copilot interface. PayPal facilitates merchant inventory surfacing, branded checkout, guest checkout and credit card payments, starting with Copilot.com.

This integration represents the newest advancement in AI-driven shopping, combining Microsoft's discovery tools with PayPal's commerce and payment features to deliver smooth, end-to-end customer experiences. Merchants can effortlessly turn their product catalogs into purchasable items using PayPal's store sync, a feature from PayPal's newly introduced agentic commerce services, built to help merchants draw in customers and thrive amid the rise of AI-powered commerce.

PayPal adopts an open approach for these capabilities, embracing leading agentic protocols and AI platforms. This lets merchants seamlessly connect to various AI ecosystems via a single integration. Interested merchants can enable agentic experiences with Copilot Checkout by signing up at PayPal.ai.

Apart from this, PayPal 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. Similarly, PayPal and OpenAI have formed a partnership to enable seamless payments and agentic commerce experiences directly within ChatGPT. The company also partnered with Perplexity to enable agentic commerce on the Perplexity Pro platform, allowing U.S. consumers to check out instantly with PayPal or Venmo.

PayPal's agentic commerce ecosystem involves strategic collaborations with Wix, Cymbio, Commerce (encompassing BigCommerce and Feedonomics) and Shopware, allowing merchants to integrate product catalogs for AI-driven discovery and seamless checkout across platforms.

How Are Mastercard and Shopify Doing in the Agentic Commerce Space?

Mastercard MA and Fiserv expanded their partnership to support agentic commerce infrastructure to help merchants navigate AI-driven payments securely. The company introduced the Mastercard Agent Pay program, enabling U.S. cardholders to shop online using AI agents securely and seamlessly. It collaborates with Stripe and Google to build agentic commerce infrastructure and standards.

Shopify SHOP partners with Google to expand the shopping capabilities of Google’s Gemini AI chatbot. It launched its Commerce Assistant Agent framework, allowing developers to embed AI-powered agents into Shopify workflows for tasks like merchandising and customer support. Integrated with OpenAI and Stripe’s Agentic Commerce Protocol, customers can buy directly via AI chats like ChatGPT, enjoying smooth, in-chat checkout experiences.

PYPL’s Price Performance, Valuation & Estimates

Shares of PayPal have declined 22% in the past six months, 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 9.80X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 20.95X.

PayPal’s estimate revisions reflect a negative trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised downward over the past two months. Yet, the Zacks Consensus Estimate for 2026 EPS suggests 9.7% 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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