PayPal's next act: Connective tissue for the future of digital commerce

PayPal Holdings Inc. is accelerating its transformation on multiple fronts, partnering with traditional finance to scale its buy now, pay later (BNPL) business, deepening roots in blockchain ecosystems, and forging alliances with tech giants to shape the next generation of commerce.

Taken together, these moves signal a company intent on remaining at the center of digital payments while shifting its balance sheet strategy and expanding into new growth markets.

Leveraging credit without burdening the balance sheet

On Sept. 24, 2025, PayPal disclosed a two-year agreement with Blue Owl Capital under which the asset manager will purchase approximately $7 billion in BNPL receivables originated in the United States. PayPal will continue underwriting and servicing its Pay in 4 product, which has been a growth engine since its 2020 launch. The company processed $33 billion in BNPL volume in 2024, up 21 percent year over year.

The arrangement reflects PayPal's "balance sheet-light" strategy. By offloading receivables to Blue Owl, PayPal frees capital to reinvest in product development and innovation while retaining customer relationships. For merchants, Pay in 4 remains an integrated, low-friction option to boost sales; for consumers, average order values remain significantly higher than with standard checkout transactions, PalPal noted.

Expanding PYUSD's reach through stablechain

Just two days earlier, PayPal's stablecoin, PYUSD, notched another milestone when Stable, a layer-1 blockchain network, revealed it will support the token across its ecosystem. The integration promises near-instant settlement and low-cost transactions, with ambitions to extend cross-chain compatibility.

PayPal Ventures also invested in Stable's funding round, underscoring PayPal's commitment to broadening PYUSD's utility. David Weber, head of PYUSD Ecosystem, framed the move as a step toward embedding stablecoins into everyday commerce. Analysts view it as a strategic bet on real-world adoption, particularly in emerging markets where dollar-based stability is attractive.

Aligning with Big Tech for agentic commerce

On Sept. 19, The Green Sheet reported PayPal's multiyear partnership with Google. The deal centers on embedding PayPal services deeper across Google's platforms and co-developing standards for "agentic commerce," a new paradigm in which AI agents initiate and complete transactions on behalf of consumers.

PayPal products, from branded checkout to Hyperwallet, will be more tightly woven into Google's ecosystem, while Google Cloud infrastructure is expected to help modernize PayPal's platform.

The collaboration is designed to position PayPal at the forefront of AI-enabled commerce, where digital agents could soon play a role akin to consumer wallets today. By aligning early with Google, PayPal is taking steps to ensure its tools remain essential in a potentially transformative shift.

Making crypto practical for merchants

In August, PayPal launched Pay with Crypto, enabling merchants to accept over 100 cryptocurrencies with instant conversion to fiat or stablecoin and fees as low as 0.99 percent. The service integrates major wallets like Coinbase and MetaMask and ties directly to PYUSD, which accrues a 4 percent rewards rate when held on PayPal.

According to PayPal, this initiative extends its strategy of mainstreaming crypto payments by reducing barriers for small and midsize merchants to sell globally at lower cost than traditional cross-border rails.

A cohesive strategy emerges

Though diverse on the surface, these moves share a theme: PayPal is offloading risk where it makes sense (credit receivables), doubling down where it sees growth (stablecoins and crypto), and partnering with tech leaders to shape emerging standards (AI-driven commerce).

The company appears to be positioning itself less as a pure payment processor and more as a connective tissue for the next wave of commerce, spanning fiat, crypto, AI and alternative credit. If successful, PayPal could extend its relevance well beyond checkout into the infrastructure layer of digital trade.

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