The first-generation payment empire PayPal might be acquired.

作者：支无不言

Around 2006, a group of small foreign trade bosses in Guangdong and Fujian started exploring opening stores on eBay. They sat in small offices next to factories, doing business with strangers on the other side of the world using broken English.

The hardest part wasn’t language or logistics, but money—how to let a U.S. buyer safely send money to a Chinese seller?

What made this possible was a blue button. That button was called PayPal.

Back then, PayPal represented the forefront of financial democratization and cutting-edge productivity. Following the “Website Payments Standard Integration Guide,” small and medium-sized businesses worldwide only needed to insert a piece of HTML code into their website to accept payments globally.

This technological equality, combined with the only officially recommended payment method during the eBay era, laid the foundation for PayPal to become an undisputed global payment leader. To this day, whenever you open an overseas checkout page, PayPal is sure to be there.

Twenty years have passed. Many of those early small foreign trade bosses have grown from eBay shop owners into cross-border merchants with independent websites, Amazon stores, TikTok, Temu, and more flourishing. China’s cross-border e-commerce exports have surpassed 2 trillion RMB, and payment tools have evolved from a blue button into a vibrant array of options like Stripe, Wise, LianLian, and Wanlihui.

The industry has grown up, but PayPal has fallen behind.

Three weeks ago, on February 3rd, PayPal announced its earnings, with its stock price plummeting 20% in a single day and the CEO stepping down in disappointment. The main source of profit—brand checkout—has seen active user growth drop from a high-speed trajectory to just 1%, and transaction volume among active accounts declined 5% over the past 12 months.

Whether it’s Stripe’s one-click link payments, biometric-verified Apple Pay, or simply filling in bank card info via Google, these seem more convenient than the somewhat outdated blue icon interface that still might require remembering passwords.

It was once a legend created by Elon Musk, Peter Thiel, Hoffman, and others. Pelosi once held a large stake, and Ark Invest was its most loyal supporter, but they all chose to sell off.

PayPal’s market value has fallen from its peak of $363 billion during the pandemic to a recent low of $38 billion—losing 90% over five years, with its P/E ratio dropping to a low of 7.4. Only today, when Bloomberg broke exclusive news that at least one major competitor is evaluating a full acquisition, and multiple parties have expressed interest in some assets, did the stock rise nearly 10%.

This news itself is the most precise commentary on PayPal’s situation. When a company begins to be seen as prey rather than predator, and its market value rises accordingly, it indicates that market confidence in its independent operation has fallen below expectations of being bought.

The once-payment empire, like a declining British Empire, still flies its flag around the world, the sun has not yet set, but those who see it no longer hold the same reverence as before. Everyone knows deep down that the times have changed. But how exactly did it fall so far?

“Seeing a company I love so much reach this point is truly painful.”

On February 3rd, former PayPal president David Marcus posted a lengthy message on X, unusually criticizing the company he once dedicated himself to.

David Marcus’s career has always been associated with radical financial innovation. He is currently CEO of LightSpark, a Bitcoin Lightning Network payment company. During his time at PayPal, he recruited top engineering talent and led acquisitions of Braintree and Venmo; at Facebook, he was one of the leaders of the sensational stablecoin project Libra. Although Libra was derailed by regulatory issues, today’s craze for stablecoins proves David’s foresight and boldness.

Besides the stock plunge, another reason prompted Marcus to post this long critique was the resignation of former CEO Alex Chriss after less than three years, succeeded by HP’s former CEO Enrique Lores.

Lores served as HP’s CEO for seven years, launching a profitable “print-as-a-service” model and initiating large-scale layoffs—undoubtedly a master of cost reduction and restructuring. If PayPal’s board had already considered a full or partial sale of the company, this candidate would seem even more fitting.

Marcus subtly expressed his dissatisfaction: “I don’t know Enrique. He might be a great leader, but at least on paper, he’s a hardware executive suddenly parachuted into a payments company.”

This echoes Marcus’s core criticism. Unlike the market’s reaction to poor financial performance, Marcus believes PayPal’s core issue is—“the company’s leadership style has shifted from ‘product-driven’ to ‘financial-driven.’ Over time, faith in the product has given way to financial optimization.”

Quoting Benjamin Franklin: any company that sacrifices its product for short-term stock performance will eventually fall behind the times and lose its stock value.

Marcus believes PayPal has lost its “mojo”—the spirit of the PayPal gang, the wild energy that dared to overturn the office roof to solve an impossible problem. Today, that energy has been replaced by compliance scrutiny and financial optimization.

Stripe, which conquers developers with simple APIs, has this mojo. Open Stripe, with its constantly jumping “Global GDP running on Stripe” in the top left corner, exudes a conqueror’s confidence.

Apple Pay, which has vigorously promoted Passkey in recent years, also has this mojo. Relying on secure chips and Face ID, it offers an extremely seamless payment experience—just lift your wrist, scan your face, and done—without even opening an app. This surpasses PayPal’s old three-step process of redirect, re-authorization, and waiting for confirmation.

Neobank leader Revolut also has this mojo. With strong execution, this emerging company quickly built a full-stack financial platform covering stocks, currency exchange, and cryptocurrencies across dozens of countries, continuously expanding its territory.

These three companies share a common trait: their mojo doesn’t come from scale, user numbers, or even money. It stems from a product belief: believing that what they’re doing can make a difference somewhere in the world. And that’s just the tip of the iceberg. Shop Pay, Klarna, Affirm, Afterpay, Wise, Cash App, Adyen—every corner of the payment track is crowded with players.

PayPal once also had this. That piece of HTML code, that button enabling garage-sale Americans and Guangzhou small factories to do cross-border settlements—was itself a declaration of changing the world. But the process of losing it was quiet, almost silent.

When talking about PayPal’s recent development, one cannot ignore Venmo.

Venmo did one thing right: turning transfers into social interactions—splitting bills, paying rent with friends, sending emojis—more fun than bank transfers. Its spread among young Americans is more like a social app than a payment tool. “Venmo me” even became a verb, a synonym for peer-to-peer transfer among young Americans.

PayPal’s acquisition of Venmo was actually a byproduct of acquiring Braintree, a payment service provider. At that time, Braintree was not so prominent, but now it’s a bright spot in PayPal’s dull financial reports: projected revenue of $1.7 billion in 2025, over 100 million active accounts, Pay with Venmo transaction volume up 50% year-over-year, and debit card users up 40%.

But behind these numbers, deep issues are fermenting: optimists obsess over doubling debit card transaction volume, seeing it as a cash cow entering a golden period of monetization; skeptics ask, if this prosperity is just draining the remaining social circles, how long can this glow last?

This split essentially reflects Venmo’s entrapment in an ecological niche: upward, it hits the walls built by Apple Pay and Google Pay; downward, it can’t penetrate the underlying infrastructure of Stripe and Adyen. Venmo’s growth is strong but has a clear ceiling.

First, internal friction in growth models. Behind 20% revenue growth is only 7% active user growth—Venmo is no longer expanding territory but taxing its existing users, squeezing the same group more thoroughly, without attracting a new generation.

Second, dual dilemmas of geography and product essence. Venmo is forever confined to the U.S., capturing American dining tables but far from entering global checkout counters.

Finally, the temporary failure of full-scenario financial imagination. PayPal designed a business loop for Venmo that included Honey, a shopping plugin meant to connect “discovery-checkout”—but in 2024, Honey nearly collapsed due to a scandal involving altered affiliate links, severing that traffic pipeline and dampening Venmo’s transformation.

How can an independent consumer payment app prove its worth to make users willingly open it? Venmo is trying to answer this question, but the answer is still unknown.

Venmo reflects PayPal’s anxiety on the consumer side. On the distant frontier, PayPal is betting on two other cards—PYUSD and Agent Payments. Both share the trait of a large enough track but no clear winner yet.

Objectively, PYUSD is doing okay. Since its launch in 2023, the market size has reached $4 billion, ranking in the top ten globally for stablecoins. But compared to Tether’s approximately $180 billion USDT and Circle’s roughly $70 billion USDC, PYUSD’s scale is just a drop in the bucket.

It instead proves one thing: even if everyone can issue stablecoins, the channels for distribution and user awareness remain high hurdles. A giant like PayPal cannot expect to win by simply lowering the bar.

In April 2025, PayPal announced a 4% annual interest rate for PYUSD holders. The industry was once stunned, thinking the giant was about to dominate the competition. But progress is gradual. The current trillion-dollar usage of stablecoins mainly involves crypto arbitrage, hedging, market-making, cross-border arbitrage, illicit fund transfers, DeFi lending, LP, yield farming—assets that PYUSD isn’t optimized for.

In the future, stablecoin use cases will become more mainstream and daily—cross-border B2B payments, on-chain settlements, retail transactions—but competition is fierce. Besides USDT and USDC, innovative USDe and the USD1 backed by the Trump family are strong rivals. PYUSD has little chance of winning outright.

Beyond stablecoins, PayPal is also eyeing agentic payments. They’ve abandoned error-prone web crawlers and are instead integrating with merchant order management systems via APIs. Merchants only need to sign agreements, and PayPal can distribute real-time data—inventory, colors, prices—to mainstream AI platforms like Google Gemini and PayPal’s own app.

The idea is clear, but it’s a market yet to be validated. Recently, “Qianwen” giving red envelopes and offering milk tea is a market education effort for AI shopping in China. But changing consumer habits takes time. Will chatting with AI to shop become mainstream? Or will the main shopping experience still be about people leisurely browsing and comparing? That remains uncertain.

Even if in the future people get used to saying, “Help me buy an iced, three-sweet oolong tea,” the platform controlling transaction data will still be the vast AI platforms with huge user bases. These platforms likely have their own payment methods or share the pie. In this new chain, PayPal’s position remains uncertain.

After all this talk of loss and uncertainty, you might think PayPal’s story has reached its end.

But reality is never one-sided. Braintree remains the underlying payment engine for many global platforms. Pay Later processed over $40 billion in transactions in 2025, leading the U.S. BNPL market. The August 2024 launch of Fastlane, a one-click checkout, was one of its few proactive moves, directly challenging Apple Pay and Shop Pay. With 400 million active accounts and over $6 billion in free cash flow annually—these assets are strategic tickets that any company aiming to compete in the AI agent economy cannot easily replicate from scratch.

Nearly thirty years of accumulation have not been wasted, nor will they vanish into thin air. It’s just a pity that the great river has flowed eastward, leaving only waves behind.

The one who understands how to use this ticket best may no longer be PayPal itself.