Stripe considering acquisition of all or parts of PayPal: Sources

NEW YORK - Payment processing firm Stripe is considering an acquisition of all or parts of PayPal Holdings, according to people 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 people said, asking not to be identified because the matter is private. 

The deliberations are early and there is no certainty they will lead to a transaction, the people said. Representatives for Stripe and PayPal declined to comment. 

PayPal closed up 6.7 per cent to US$47.01 in New York on Feb 24, giving it a market value of US$43.3 billion (S$54.9 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 on Feb 24, Stripe announced it had reached a US$159 billion valuation in an employee tender offer.

“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,” Mr John Collison, Stripe’s president, said in an interview this week. “I can’t talk about any, you know, M&A (mergers and acquisition) hypotheticals but they’ve 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 on March 1, replacing Mr Alex Chriss, who was ousted as CEO in February. 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