Google and PayPal have just formalized a multi-year strategic partnership to reshape digital commerce using artificial intelligence. At the heart of this collaboration is the development of new AI-driven shopping and payment experiences, deeper integration of PayPal’s payments tools into Google’s ecosystem, and the rollout of Agent Payments Protocol (AP2) — an open standard for enabling AI agents to transact on users’ behalf in a secure, transparent way.

Key Elements of the Partnership

Here are the leading pillars of what Google & PayPal are doing, based on the most recent public disclosures:

Google & PayPal New Developments & Context

These are recent developments and context that sharpen the picture:

• Agent Payments Protocol Public Launch
  In September 2025, Google published the AP2 specification. It is now a public standard with reference implementation available, and over 60 companies have already pledged support.
  
• Industry Momentum
  Major players in payments and commerce, such as Mastercard, Adyen, American Express, Etsy, Revolut, and Coinbase, are backing AP2. That gives credibility and increases the odds that this standard will be widely adopted.
  
• Competitive & Regulatory Landscape
  Other firms, from banks to fintechs, are exploring AI-mediated commerce. The standardization effort is, in part, a competitive move to define how “agentic commerce” will work. At the same time, regulators will likely examine liability, data privacy, and fraud management closely, areas AP2 seeks to address with mandates and verifiable credentials.
  
• Financial & Stock Market Reactions
  Analysts see the deal as promising but stress that agentic commerce may take time to generate significant revenues. PayPal’s stock has seen modest positive movement since the announcement.

What’s Still Unclear / Potential Challenges for Google & PayPal

• Which “agentic shopping experiences” will reach consumers first — such as virtual assistants or autonomous procurement — is not yet clear.
  
• How user consent, privacy, and liability will be managed in practice remains an open question, especially across different jurisdictions.
  
• Merchant adoption may vary: large enterprises will likely move faster, but small merchants could face integration challenges.
  
• Consumer trust is crucial. Users must feel confident letting AI agents transact on their behalf, with transparency and control to reverse mistakes if needed.

Implications of the Google & PayPal alliance: What This Means for Stakeholders

• For Consumers: More convenience, personalization, and streamlined checkout experiences. At the same time, new responsibilities in understanding and managing permissions for AI agents.
  
• For Merchants: Opportunities to sell through AI-assisted channels and reduce cart abandonment. However, new technical and compliance requirements will need to be met.
  
• For Developers / Tech Vendors: AP2 creates opportunities to build SDKs, frameworks, and services that enable secure agent-led transactions.
  
• For Regulators & Policy Makers: This evolution in commerce will require oversight on consumer protection, disclosure, liability, and data privacy.
  

The Google-PayPal partnership is more than just embedding PayPal into more of Google's products. It signals a push toward a new paradigm: agentic commerce, where AI agents will increasingly act on users’ behalf, enabled by open, secure, and verifiable protocols like AP2. If successful, this could reshape how consumers shop, how merchants sell, and how payments are processed.

The strategy is ambitious, and the potential rewards are high — but there are technical, regulatory, and trust hurdles to overcome. Much will depend on how well the industry adopts AP2 and how quickly consumer-facing agentic applications are rolled out.

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PayPal has officially launched its advertising division, PayPal Ads, offering advertisers access to transactional data from its more than 400 million users. This new advertising offering will initially be available in the United States, although the company plans to expand to the United Kingdom and Germany.

The unit is headed by Mark Grether, a veteran in the advertising sector who drove ad businesses at giants such as Uber and Amazon. Among the services announced are the ability to reach consumers throughout the buying process, cross-vendor insights, market share analysis, optimization opportunities across multiple touchpoints, and 'closed-loop' attribution. 

The PayPal Ads strategy focuses on leveraging the enormous amount of data the firm collects from its 400 million active users. “The amount of transaction data we have at our disposal is incredible, far more than any retailer can offer,” Grether said in an interview with AdWeek. And that's because, unlike traditional merchants, the payments platform has a much broader view of consumers' shopping habits, spanning multiple stores and platforms.

The formal launch of PayPal Ads follows months of initial testing with an advertising feature within the PayPal app called “Advanced Offers,” which allows advertisers to offer promotions such as cashback and discounts. The company has expanded that offering to include graphical ads on its platforms, such as the PayPal app, Venmo, and Honey, a tool that helps consumers find coupons and cashback.

PayPal planned expansion

PayPal won't just be limited to displaying ads on its platforms. According to Grether, the company plans to expand its ad offerings to include video ads by 2025 and a self-service platform for brands to manage their campaigns.

Similarly, it will look to sell advertising space on retailers' websites that use its technology to process payments. This will enable advertisers to reach many consumers already shopping online at various retailers.

In addition, PayPal Ads also seeks to help brands that distribute products across multiple retailers increase their market share at specific points of sale. To achieve this, the company will advise where to spend advertising dollars most efficiently and which audiences to target.

Last May, PayPal anticipated the launch of its new advertising division and announced Mark Grether as senior vice president and general manager of PayPal Ads and John Anderson as senior vice president and general manager of the Consumer Group. Both will report to Diego Scotti, executive vice president and general manager of the Consumer Group and Global Marketing and Communications.

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PayPal enters a new phase of its business with the launch of PayPal Everywhere, a feature that allows users to make payments in physical stores using a digital debit card. This strategic move has been accompanied by a comprehensive overhaul of the brand's visual identity, which unlinks the iconic monogram from the company's name.

The redesign has been carried out by the design agency Pentagram, which defines the new image as “simpler, cleaner, more modern and more optimistic.” The agency explains that it has sought to reflect the way in which the company has sought to simplify buying and paying for more than twenty years and how, with the new functionality, it continues on that path.

As they detail, the new identity unifies the PayPal brand, and does so with a system that includes a new typography, called PayPal Pro, an optimized color palette and a movement language based on the user's gestures and behaviors when making everyday payments, such as tapping, twisting and swiping the card.

PayPal bets on a more modern design

One of the most notable changes is the redesign of PayPal's iconic isotype, which has been refined to be sharper and more modern. The letterforms have been adjusted, and the colors have been calibrated to offer greater contrast and a sense of depth. The monogram now functions independently of the brand name, which Pentagram says gives it greater visual flexibility. In turn, the new logo becomes the central element of the visual identity, using the PayPal Pro typeface to convey attributes of boldness, confidence and clarity.

In addition, a secondary typeface, PayPal Pro Text, is being developed to ensure legibility at small sizes while maintaining visual consistency across all brand touch points.

New color palette and visual style

The redesign also includes a more neutral color palette, dominated by black and white tones that highlight the PayPal name and differentiate it from the usual blue tones associated with financial technology. Although blue is still present, it is used only for specific details, and yellow, which was part of the previous palette, has been eliminated.

According to Pentagram, this simplified palette allows PayPal to highlight its brand personality in color-saturated images. The new identity system also incorporates a focus on accessibility. The accompanying images and photographs are designed to convey real, authentic moments, highlighting the platform's approachability and ease of use. In addition, the identity has been infused with animations that are inspired by users' everyday behaviors, highlighting how intuitive it is to make payments with PayPal.

Will Ferrell is the image of the new PayPal

The company has already begun to implement these changes across its communication platforms and touchpoints, as can be seen in the new campaign accompanying the launch of PayPal Everywhere. The ad, starring actor Will Ferrell and featuring the iconic song “Everywhere” by Fleetwood Mac, shows the advantages of using PayPal to make payments in physical stores, marking a milestone in the company's evolution.

With this new phase, PayPal not only expands its functionality to the offline world, but does so with a renewed image that reinforces its role as a leader in digital payments, staying relevant and accessible in an ever-changing financial landscape.

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PayPal has announced new managerial appointments to develop a PayPal Ads solution. This PayPal Ads will be a new advertising platform to strengthen the company's consumer value proposition. 

Specifically, as reported by the company in a statement, Mark Grether has been named senior vice president and general manager of PayPal Ads; and John Anderson, as senior vice president and general manager of the Consumer Group. Grether and Anderson will report to Diego Scotti, executive vice president, general manager of the Consumer Group and Global Marketing and Communications.

PayPal has highlighted long-standing relationships with millions of consumers and merchants that make the company “uniquely positioned to create an advertising platform rooted in commerce.” Grether will join the company to build an advertising business that will help merchants get smarter to sell more products and services effectively while allowing consumers to discover more of what they like.

PayPal Ads will use customer data to create a dynamic, personalized platform that will drive a better return on ad spend for marketers while delighting consumers with compelling offers.

PayPal recruits the head of Uber Advertising 

Grether joins PayPal from Uber, where he served as vice president and general manager of Uber Advertising. Under his leadership, Uber Advertising grew to a $1 billion business with more than 500,000 advertisers worldwide. He successfully led the acceleration of the company's global advertising business, helping marketers, brands and other advertisers reach Uber's highly engaged user base in its Mobility and Delivery divisions

Prior to Uber, Grether led product strategy for Amazon's advertising business and was CEO of Sizmek, one of the world's largest independent advertising platforms, which was sold to Amazon in 2019. Previously, Mark was co-founder and global COO of WPP's Xaxis.

“Commerce and advertising are deeply connected, and we believe the advertising platform we're building at PayPal will become a must-have marketing channel for merchants large and small. I'm thrilled to have Mark join our team and lead this important work,” said Scotti.

On his side, Anderson has spent more than 20 years at the intersection of technology platforms and payments. He will be responsible for PayPal's consumer business, including product strategy for PayPal and Venmo globally. Anderson joins PayPal from Plaid, where he was Head of Product and Payments and oversaw significant growth of Plaid's suite of payment products. Prior to Plaid, John spent a decade at Meta in numerous product and leadership roles, including head of product for Oculus, head of Facebook Japan, and head of the payments, commerce and risk product and operations teams.

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Payments platform Stripe surpassed the $1 trillion mark in total payment volume in 2023, a 25% growth over the previous year.

This milestone comes 15 years after the company's founding and offers insight into the finances of one of the world's largest technology companies and how fast it is growing. By comparison, PayPal surpassed $1 trillion in total payment volume in 2021, 23 years after its founding.

There are currently 100 companies using their service that process $1 billion or more per year with Stripe. These companies represent around 10% of their total payment volume, but more importantly, Stripe is managing to maintain large accounts over time.

On the other hand, "Revenue and Finance Automation" offerings are expected to reach an annual volume of $500 million this year. These tools help companies manage billing, tax, and revenue recognition.

A competitive market for Stripe 

The company's annual letter also includes an interesting statistic about startups. Despite poor conditions for startup fundraising last year, which fell to its lowest level in six years, the Collison brothers, founders of Stripe, said the company's data indicates that startups founded in 2022 generate revenue faster than those established in 2019. In particular, artificial intelligence companies are outperforming other sectors.

But not all the money derived from this ‘ai-boom’ is going through Stripe or PayPal. In fact, the e-commerce payment gateways market has quickly become incredibly competitive. Here is a short comparison of the main brands and payment solutions currently in the market. 

The best payment gateways at a glance

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PayPal is reading for the imminent entry into force of the EU's Digital Services Act (DMA) with a new initiative: offline payments. TechCrunch reported that the company plans to expand its dominance into physical transactions.

For PayPal, the DMA represents a significant shift from allowing third-party apps to access NFC technology, which currently powers Apple Pay. This way, iPhone users can choose alternative mobile wallets as their default option. At this time, the company has not disclosed much more detail about its plans with respect to Apple's DMA compliance or how it will specifically affect PayPal.

In the words of Alex Chriss, CEO of PayPal, "The company's strategy is focused not only on continuing its successful collaboration with Apple but also on exploring new avenues to meet its users' demand for omnichannel and offline solutions." 

While the CEO did not reveal specific details on when PayPal will implement DMA-enabled offline solutions, he assured that "the company will be ready to do so as soon as the new functionality is available."

PayPal Physical is a long-term project 

PayPal's foray into physical payments is not new. Over the past decade, PayPal has made several attempts, from partnerships with national retailers in the U.S. to developing mobile wallet technologies and using QR codes. However, despite these efforts, Apple Pay has remained the main player in this sector, especially in the United States. 

In Europe, on the other hand, mobile wallets have a high penetration rate. According to the latest studies, the majority (72%) actively engage with this technology. 

By 2024, the size of the mobile payments market in Europe is estimated to reach $108.35 billion (€100,611.7 million); and $373.29 billion (€346,627 million) by 2029. While Apple and Google have gained ground, according to the data, 90% of Europeans have used PayPal's services.

The DMA, which will come into force on March 7, is designed to end persistent unfair practices in the digital ecosystem and address the role of digital gatekeepers in the online marketplace.

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Paypal is under investigation by the Federal Cartel Office (FCO) in Germany. The company has allegedly hindered market and price competition in its terms and conditions, the German watchdog says.

Paypal is currently one of the leading online payment methods in Germany: it is used by over 50 percent of German online shoppers. The German watchdog announced its investigation into the payment giant this week.

According to the German FCO (Bundeskartellamt), Paypal has possibly restricted market competitors in its user agreement. Merchants are currently not allowed to offer their goods and services at a lower price to customers who choose a cheaper payment method than PayPal.

In addition, retailers are barred from expressing a preference for other payment methods or making their use more convenient for customers.

Why is Paypal under investigation?

The Bundeskartellamt claims these terms may make it “more difficult” for other payment methods to “compete successfully” with PayPal or to enter the market in the first place.

Bundeskartellamt president Andreas Mundt says: “These clauses might restrict competition and violate the prohibition of abuse of a dominant position.

“We will now assess the extent of PayPal’s market power and how far online sellers depend on offering PayPal as a payment method.”

The Bundeskartellamt cites market studies that show PayPal is both the leading online payment method in Germany and one of the most expensive.

The regulator says the antitrust proceeding is based on legislation that prohibits the abuse of a dominant position as well as potential anti-competitive agreement violations.

PayPal is not the only one

In a separate antitrust action in Europe last year — also concerning digital payments — the Dutch Authority for Consumers and Markets forced iOS maker Apple to allow dating apps operating in the market to use non-Apple-based payment technology to process in-app sales.

Apple initially sought to challenge the order, but after a string of penalty payments and several months of back and forth, it came up with a proposal that was accepted by the watchdog last summer.

In recent years, the European Union has also been eyeing online payment tech — taking action last year over restrictions Apple applies to Apple Pay.

Such interventions prefigure bigger and potentially more impactful changes for tech giants in the European Union this year as a significant competition reform, called the Digital Markets Act, comes into application across the bloc. This “ex-ante” regime will flip the classical antitrust protocol — whereby market power must be assessed, and investigation precedes remedy — by applying, upfront, a set of fixed rules on platforms designated as competitively significant “gatekeepers.” 

To become more responsive and proactively level the playing field between giants and the smaller competitors that rely on them to reach consumers.

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Well-known payment provider PayPal carried out an annual survey in collaboration with Ipsos on cross border purchases by consumers worldwide. For this Cross-Border Consumer Research in 2018, they collected survey results at a global level between March and May 2018, to examine how people shop online and across borders. The survey was conducted in 31 countries among a total of 34,000 consumers who are active online.

Cross-border shopping

According to the survey, online shoppers based in Ireland, Austria and Israel are most likely to shop cross-border. A significant percentage of 19% of Irish online shoppers say they never make purchases at Irish web shops and therefore only shop across borders. Consumers in Japan, Germany and the United States behave the exact opposite way. In these countries, most consumers would rather shop domestically than cross-border.

In general, consumers from the Middle-East (70%) and Africa (62%) are most prevalent to shop cross-border. European consumers follow with 56% of consumers regularly shopping cross-border. In North America, cross-border shopping is less popular: less than half (48%) of the online shoppers use cross-border webshops.

Popular destinations

There is no need to mention that cross-border shopping is huge. The above stated facts show that a lot of online shoppers purchase products through web shops that are based in other countries than themselves. However, when they shop cross-border, which countries are the destination of these cross-border purchases? Research shows that the United States and China are online shoppers’ most popular cross-border destinations. 26% of all cross-border purchases are made on a Chinese webshop or platform and the US is the destination for 21% of cross-border purchases. The UK (14%), Germany (10%) and Japan (5%) complete the top five of the most popular cross-border destinations.

Commonly used devices

In addition to the great differences between countries when it comes to shopping domestically or cross-border, there are also differences between the countries in which devices are most popular to use when shopping online. Even though the computer is still the most common device to use for online purchases, mobile devices are becoming more popular.

Online shopping on mobile devices (e.g. tablet, smartphone, smart TV) is most common in Asia (44%), Latin America and Africa (both 41%). Using mobile devices is especially popular in China, the United Arab Emirates and India. In these countries, almost 60% of online shoppers use mobile devices.

However, most online shoppers based in Western Europe (68%), Eastern Europe (71%) and North-America (64%) prefer using a desktop device rather than a mobile device. Online shoppers in Belgium, Germany and France are most hesitant to use mobile devices for online shopping. More than 75% of these online shoppers prefer desktops. This fact is not specifically related to cross-border shopping, but to technology in general. The use of mobile devices is generally less developed in Belgium, Germany and France than in other countries.

Whilst consumers in most western countries are hesitant to use mobile devices for online shopping, consumers in the United States do not seem to share this. 50% of the online purchases in the US are made through a mobile device. On the other hand, 70% of Japanese consumers tend to use desktop devices for making online purchases.

Reasons for shopping cross-border

Costs are the main driver for online shoppers to shop at a cross-border webshop. Today’s online possibilities make it easier to find the desired product for the best price, either domestically or cross-border. This results in 72% of online shoppers purchasing items on cross-border webshops to get the best price.

Another important reason for cross-border shopping is the possibility of buying products that are not available in the home country of the consumer. 49% of the surveyed shoppers says this is a reason for them to shop cross-border. Other reasons for cross-border purchasing are the discovery of new and interesting products (34%), higher product quality (29%) and less expensive shipping (24%).

The PayPal Cross-Border Consumer Research 2018 shows us that cross-border shopping is becoming more and more common. However, there are great differences in online shopping in countries all over the world. Also, the majority of online purchases are still made on a desktop device such as a laptop or PC, although mobile devices are becoming more common to use as online shopping device. In addition, devices such as Smart TV’s and games consoles are progressing when it comes to usage for online shopping. Download the full Cross-Border Consumer Research 2018 here.

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In PayPal's Policy Updates, the following is stated:

PayPal is making a change to its User Agreement that will be effective as to all PayPal users in the U.S. on November 7, 2018. We encourage you to review this Policy Update and familiarize yourself with this change that is being made. If you do not agree to these amendments, you may close your account before November 7, 2018.

Amendments to the PayPal User Agreement

• For personal accounts, we are changing the fee charged for our faster withdrawal option to an eligible debit card linked to your PayPal account to 1% of the transferred amount, with a maximum fee of $10.00. 

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The deadline for merchants to upgrade to TLS 1.2 is June 30th, 2018. PayPal is requiring all merchants to upgrade their security protocol to TLS 1.2, in line with recent requirements set by the Payment Card Industry Council (PCI). This protocol is used to encrypt communications between the PayPal servers and a merchant's platform. To upgrade to TLS 1.2, merchants should verify whether their website supports TLS 1.2, or perform the necessary updates.

Do you require more information about the changes and how to implement them? Visit PayPal's Merchant Security Microsite.

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