PayPal integrates artificial intelligence in payments and fraud prevention with Meta's Muse, while its shares have fallen 80% since 2021 and it seeks new growth engines.
PayPal has initiated a transformation to stop being just the payment button that millions of users see in online stores. The company, with around 439 million active accounts in about 200 markets, wants to become a provider of digital commerce infrastructure, according to actualidadecommerce.com. Its latest moves range from fraud prevention to artificial intelligence applied to shopping.
The numbers for 2025 show a duality. PayPal reported profits of $5.233 billion, more than in any other year in its history. However, the value of its shares has plummeted by more than 80% from the peak reached in 2021. The stock market values it at a multiple of approximately 10 times its profits, a price that assumes the company will not grow again.
The firm has integrated IPQualityScore in environments like Alloy, Shopify, and Stripe. This partnership allows for real-time information to be incorporated into transaction checks, account verification, and security flows. The goal is to reposition itself as more than just a payment processor and offer a broader layer of services to merchants.
Additionally, features like Pay Later and installment payments, along with analyses of holiday shopping, reinforce this strategic shift. The company wants to reduce its excessive dependence on the payment button and boost Venmo alongside financial services, which act as a new growth engine.
PayPal and Meta are advancing a new way to shop online with artificial intelligence. The integration of payments within Muse, the autonomous assistant developed by Meta, allows users to specify what product they need and let the system search for options, compare prices, and prepare the purchase. PayPal handles the payment processing without the user having to manually enter their card details.
To connect AI with stores and payment systems, standardized protocols are used. Among them is WebMCP, an initiative led by PayPal, which allows assistants to discover websites and interpret catalogs. Shared Payment Tokens, created in collaboration with Stripe, also come into play, using temporary and encrypted codes without exposing the actual card.
Before transferring funds, Muse interrupts the process and requires the person to manually approve the transaction. PayPal or Stripe issue a payment token or a one-time virtual card. Muse is operational in the United States and integrates with WhatsApp, Instagram, and Messenger, as well as Meta's Ray-Ban glasses.
In the second quarter of 2026, PayPal processed $486.448 billion. Its most profitable business, the payment button, has grown from 5% a year ago to just 2% currently. Braintree and payment processing are up 13%, while Venmo is up 14%.
The board of directors decided to replace Alex Chriss in February. He is succeeded by Enrique Lores, former CEO of HP, who trained at the Polytechnic University of Valencia and ESADE. Lores unveiled a structured plan to steer its new phase in three areas: the payment button, Venmo alongside financial services, and processing for merchants.
In July, Stripe and Advent Fund offered $60.50 per share. PayPal rejected it as insufficient. The consortium withdrew on August 28, causing a 13% drop in the stock price that same day.
Although Muse starts in the United States, the collaboration with PayPal lays the groundwork for expanding this model to other territories. The company is present in around 200 markets, including Spain. The agentic commerce strategy could reach European users in the future.
For Spanish investors, buying PayPal shares is possible through brokers like Trade Republic, which offers a Spanish IBAN and charges a fee of 1 euro per transaction. The ISIN for the stock is US70450Y1038. Other options include DEGIRO or Lightyear.
The biggest risk lies in the possibility that the PayPal button becomes just another option, unable to maintain current fees. In the last eighteen months, no executives have purchased shares in the market, only minor sales have been recorded, most with scheduled plans.
The shares are trading at a multiple of approximately 10 times estimated profits, a valuation that assumes the company will not grow again. PayPal is undertaking ambitious stock buyback programs, allocating $6 billion in a year. If the business holds up, shareholders will own a larger portion each year.
PayPal is undergoing a profound transformation to stop being just the payment button. Artificial intelligence and agentic commerce are shaping up as the keys to its new strategy.
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