Stripe, the payment company that has shown more interest in crypto, is said to be considering a possible acquisition of PayPal or its subsidiaries, according to a report by Bloomberg.
This is an indication that Stripe is also expanding its plans for digital payments and crypto as the competition among fintech companies continues to rise.
Although the talks are still in the early stages, it is clear that Stripe is considering a possible way to increase its presence in the global digital payments market.
Stripe launches tender offer valuing company at $159 billion
Separately, Stripe announced a tender offer that will allow current and former employees to sell shares at a company valuation of $159 billion.
The liquidity program is backed largely by investors including Thrive Capital, Coatue and a16z, with Stripe also using some of its own funds to repurchase shares, signaling strong investor confidence in the company’s growth trajectory.
PayPal, which is considered a pioneer in online payments since the 1990s, is one of the major players that made online transactions and online wallets a mainstream phenomenon.
PayPal was instrumental in creating the internet economy by providing a secure means of transferring money online when online payments were still a new concept.
PayPal expands crypto offerings to stay competitive
In recent years, PayPal has been trying to keep up with the competition by venturing into the digital assets and crypto services space.
But the payment giant has been under increasing pressure from new fintech competitors like Stripe, which have been steadily taking market share by providing faster innovation, developer-friendly tools, and tighter integration with the latest internet businesses.
As the competition heats up, PayPal has had trouble at times sustaining the same level of dominance it once enjoyed in the rapidly changing digital payments space.
Stripe and PayPal are both getting more involved in the crypto world, and they both see stablecoins as the next big thing in digital payments.
Stripe’s crypto strategy has garnered attention for a larger market audience. Last year, it bought the stablecoin platform Bridge, which later got conditional approval from the U.S. Office of the Comptroller of the Currency to apply for a federal banking charter. This shows that regulated blockchain finance is becoming more accepted by institutions.
PayPal, on the other hand, made its entry into the space in 2023 with its PYUSD stablecoin, which was launched simultaneously with Paxos.
Following Paxos’ receipt of a federal banking charter, PYUSD is now the largest dollar-denominated stablecoin to be issued under a federal charter, with a market cap of $3.8 billion.
User sentiment also reflects increasing adoption, with most PayPal users anticipating widespread use of crypto payments in the next five years with the company’s expansion of support for bitcoin, ether, and stablecoin payments.