PayPal stock jumped 13% after the company announced a partnership with OpenAI
PayPal struck a deal with OpenAI on Tuesday that places its payment system directly within ChatGPT. Users can now buy stuff they find through the popular AI tool without leaving the platform.
The news sent PayPal’s shares soaring 13% higher. The companies formed the agreement over the weekend. Next year, PayPal customers will be able to shop through ChatGPT, and businesses using PayPal will be able to sell their products via ChatGPT.
“We’ve got hundreds of millions of loyal PayPal wallet holders who now will be able to click the ‘Buy with PayPal button’ on ChatGPT and have a safe and secure checkout experience,” PayPal boss Alex Chriss said in an interview.
OpenAI expands e-commerce ambitions
This move places PayPal squarely in the middle of OpenAI’s major push to transform ChatGPT into a shopping hub. The AI company wants its massive user base of more than 700 million people to use artificial intelligence like a personal shopper each week.
OpenAI already made similar deals last month with Shopify and Etsy. Two weeks back, it also teamed up with Walmart for online shopping.
“It’s a whole new paradigm for shopping,” Chriss said. “It’s hard to imagine that agentic commerce isn’t going to be a big part of the future.”
PayPal wants to become the go-to payment system for this new wave of AI shopping. The company also recently signed deals with Google and AI firm Perplexity. PayPal also released its third-quarter earnings on Tuesday, along with details about the OpenAI partnership, following CNBC’s initial report.
Technical integration and security benefits
PayPal will do more than just process payments. The company will handle technical tasks, such as routing merchants and verifying payments for PayPal sellers, using ChatGPT. Individual businesses won’t need to sign separate deals with OpenAI.
Chriss pointed out that PayPal has already checked both shoppers and businesses, which cuts down on fraud risk. Customers can pay using their bank accounts, credit cards, or PayPal balances. They’ll get purchase protection, package tracking, and help with disputes.
“It’s not just that a transaction can happen,” Chriss said. “It’s that this is a trusted set of merchants, the largest merchant network in the world from PayPal, that are verified, with the largest set of verified consumers in a consumer wallet.”
PayPal also said it will use more of OpenAI’s business AI tools to help its own workers get things done faster and speed up making new products.
When OpenAI rolled out its Instant checkout feature earlier, it also partnered with Stripe. That deal lets users tap into saved payment cards and bank details when buying from Etsy sellers through Stripe’s Link service.
Stripe calls Link a wallet and says it has 200 million users, but the service can’t store money and doesn’t have a phone app for consumers. Many financial technology experts don’t think it’s a real wallet yet.
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