Payments processor Stripe expresses interest in PayPal
Stripe has become one of the industry’s most coveted players
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[NEW YORK] Payment processing firm Stripe is considering an acquisition of all or parts of PayPal Holdings, according to sources 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 sources said, asking not to be identified because the matter is private.
The deliberations are early and there’s no certainty they will lead to a transaction, the sources said. Representatives for Stripe and PayPal declined to comment.
PayPal closed up 6.7 per cent to US$47.01 in New York on Tuesday (Feb 24), giving it a market value of US$43.3 billion.
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 and Alphabet have seized market share.
Stripe, founded by brothers Patrick and John Collison, has become one of the industry’s most coveted players. Earlier Tuesday, Stripe announced it had reached a US$159 billion valuation in an employee tender offer.
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“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,” said John Collison, Stripe’s president. “I can’t talk about any, you know, M&A hypotheticals but they have 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 Mar 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
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