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PayPal Agentic Payments: Can They Reshape the Future of Commerce?
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Key Takeaways
PYPL is integrating agentic payments into its strategy, with greater impact expected from 2028 onward.
Venmo and BNPL TPV rose 14% and 26%, respectively, while Pay with Venmo expanded 44%.
PYPL generated $1.8B in adjusted free cash flow to support strategic growth initiatives and innovation.
PayPal Holdings, Inc. (PYPL - Free Report) is incorporating agentic payments into its long-term growth strategy alongside digital identity and broader AI-commerce capabilities. Management expects these next-generation products to become more meaningful from 2028 onward. The aim is simple: to use PayPal’s network, data, risk tools and merchant relationships to support new secure ways of buying.
The company also links agentic technology with stablecoins, identity and biometrics, areas where PayPal believes it can leverage its two-sided network, risk infrastructure and trust among consumers and merchants. PayPal World is already facilitating about $200 million of payment volume between Venmo and PayPal, showing how the company is trying to connect separate parts of its ecosystem.
PayPal is also building momentum in products that could connect with agentic commerce. Venmo total payment volume (TPV) grew 14%, Buy Now, Pay Later (BNPL) volume rose 26% and Pay with Venmo expanded 44%. Braintree TPV continued to grow in the mid-teens, giving PayPal broad exposure across consumer payments and merchants processing as the payments landscape evolves.
The opportunity arrives as PayPal’s core business shows signs of stabilization. The company’s second-quarter 2026 revenues rose 5% to $8.68 billion, while TPV increased 10% to $486.4 billion. Branded checkout volume grew 2% on a currency-neutral basis, giving PayPal a more stable base from which to fund longer-term innovation projects.
PayPal has the financial capacity to support these longer-term investments. The company generated $1.8 billion of adjusted free cash flow in the second quarter and is targeting at least $1.5 billion of gross run-rate savings over two to three years, with much of those savings expected to support strategic growth initiatives.
How Are Other Competitors Faring?
Visa, Inc. (V - Free Report) is advancing agentic commerce through Visa Intelligent Commerce, introduced in April 2025. The platform works with AI and technology companies including Anthropic, IBM, Microsoft, OpenAI, Perplexity, Stripe and others, enabling AI agents to search, select and pay securely. In third-quarter fiscal 2026, Visa processed 71.7 billion transactions, up 10% year over year.
Mastercard Inc. (MA - Free Report) is pursuing a similar strategy through Mastercard Agent Pay, announced in April 2025. The program uses Mastercard Agentic Tokens and works with Microsoft, IBM, Braintree and Checkout.com to let verified AI agents transact using tokenized credentials. In the second quarter of 2026, Mastercard reported 47.4 billion switched transactions, up 9% year over year.
PYPL’s Price Performance, Valuation & Estimates
Shares of PayPal have gained 40.5% in the past three months compared with the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
From a valuation standpoint, PayPal’s shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 11.03X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 18.85X.
Image Source: Zacks Investment Research
PayPal’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward to $5.38 in the past week. The consensus estimate for the metric indicates a year-over-year increase of 1.13%.
View the Zacks #1 Rank List
Image: Bigstock
PayPal Agentic Payments: Can They Reshape the Future of Commerce?
Key Takeaways
PayPal Holdings, Inc. (PYPL - Free Report) is incorporating agentic payments into its long-term growth strategy alongside digital identity and broader AI-commerce capabilities. Management expects these next-generation products to become more meaningful from 2028 onward. The aim is simple: to use PayPal’s network, data, risk tools and merchant relationships to support new secure ways of buying.
The company also links agentic technology with stablecoins, identity and biometrics, areas where PayPal believes it can leverage its two-sided network, risk infrastructure and trust among consumers and merchants. PayPal World is already facilitating about $200 million of payment volume between Venmo and PayPal, showing how the company is trying to connect separate parts of its ecosystem.
PayPal is also building momentum in products that could connect with agentic commerce. Venmo total payment volume (TPV) grew 14%, Buy Now, Pay Later (BNPL) volume rose 26% and Pay with Venmo expanded 44%. Braintree TPV continued to grow in the mid-teens, giving PayPal broad exposure across consumer payments and merchants processing as the payments landscape evolves.
The opportunity arrives as PayPal’s core business shows signs of stabilization. The company’s second-quarter 2026 revenues rose 5% to $8.68 billion, while TPV increased 10% to $486.4 billion. Branded checkout volume grew 2% on a currency-neutral basis, giving PayPal a more stable base from which to fund longer-term innovation projects.
PayPal has the financial capacity to support these longer-term investments. The company generated $1.8 billion of adjusted free cash flow in the second quarter and is targeting at least $1.5 billion of gross run-rate savings over two to three years, with much of those savings expected to support strategic growth initiatives.
How Are Other Competitors Faring?
Visa, Inc. (V - Free Report) is advancing agentic commerce through Visa Intelligent Commerce, introduced in April 2025. The platform works with AI and technology companies including Anthropic, IBM, Microsoft, OpenAI, Perplexity, Stripe and others, enabling AI agents to search, select and pay securely. In third-quarter fiscal 2026, Visa processed 71.7 billion transactions, up 10% year over year.
Mastercard Inc. (MA - Free Report) is pursuing a similar strategy through Mastercard Agent Pay, announced in April 2025. The program uses Mastercard Agentic Tokens and works with Microsoft, IBM, Braintree and Checkout.com to let verified AI agents transact using tokenized credentials. In the second quarter of 2026, Mastercard reported 47.4 billion switched transactions, up 9% year over year.
PYPL’s Price Performance, Valuation & Estimates
Shares of PayPal have gained 40.5% in the past three months compared with the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
From a valuation standpoint, PayPal’s shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 11.03X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 18.85X.
Image Source: Zacks Investment Research
PayPal’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward to $5.38 in the past week. The consensus estimate for the metric indicates a year-over-year increase of 1.13%.
Image Source: Zacks Investment Research
PayPal currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.