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PayPal (PYPL) is making a significant move into the burgeoning world of AI-driven commerce, announcing an exclusive deal with OpenAI to integrate its digital wallet directly into ChatGPT. This strategic alliance will allow ChatGPT users to seamlessly purchase goods and services discovered through the AI platform using their PayPal accounts, CNBC has learned. The announcement sent PayPal shares soaring, jumping as much as 13% in early trading.
The agreement, finalized over the weekend, is poised to create a powerful synergy between PayPal’s extensive financial ecosystem and OpenAI’s advanced AI capabilities. According to PayPal CEO Alex Chriss, the integration, slated to launch next year, benefits both sides of PayPal’s network. “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,” Chriss stated in a recent interview, highlighting the convenience and security benefits for consumers.
Beyond consumer ease-of-use, the partnership will also empower PayPal merchants, enabling them to list and sell their products directly through ChatGPT. This provides merchants with a new and potentially vast sales channel, tapping into the growing user base of AI-assisted shopping.
PayPal’s move positions it at the forefront of OpenAI’s drive to expand ChatGPT’s presence in e-commerce. With over 700 million weekly users engaging with ChatGPT, the potential for streamlined AI-driven purchases is immense. The concept mirrors the experience of having a personal shopper, where AI intelligently guides users toward relevant products and facilitates instant purchases. OpenAI has recently forged similar alliances, enabling transactions with Shopify (SHOP) and Etsy (ETSY) merchants, and even announcing a partnership with Walmart (WMT) to integrate their offerings into the AI platform.
“It’s a whole new paradigm for shopping,” Chriss emphasized, predicting that “agentic commerce,” where AI acts as an intelligent agent to facilitate purchasing decisions, will be a dominant force in the future of retail. This bold prediction underscores PayPal’s strategic vision of becoming a key payment infrastructure provider for this new era of commerce.
This isn’t PayPal’s only foray into the realm of AI-powered commerce. The company recently revealed expansions of partnerships with Google (GOOG) and the AI search company Perplexity. These partnerships further solidify PayPal’s role as a central player in the evolving landscape of AI-driven online retail. PayPal’s third-quarter results, released alongside the OpenAI announcement, signal the company’s commitment to remaining competitive in rapidly changing payments industry. A company release followed the CNBC report, further detailing their collaboration with OpenAI.
PayPal will also be responsible for managing crucial backend functions for merchants using ChatGPT, including payment routing and validation. This simplified approach eliminates the need for merchants to individually register with OpenAI, further streamlining the integration process.
Chriss underscored the benefits of PayPal’s rigorous verification processes for both consumers and merchants, stating that this reduces the risk of fraud. The secure mechanism for payments will use linked bank accounts, credit cards, or stored balances. Users will also receive package tracking and dispute resolution services.
“It’s not just that a transaction can happen,” Chriss added. “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.”
Moreover, PayPal will be utilizing OpenAI’s enterprise AI capabilities for internal applications, streamlining product development lifecycles and enhancing operational efficiency.
The PayPal-OpenAI deal highlights the competitive landscape within the burgeoning “instant checkout” space. Last month, OpenAI also announced a partnership with Stripe, enabling users to leverage saved card and bank information to purchase from Etsy vendors. Stripe’s “Link” platform, claiming 200 million users, positions itself as a payment wallet. However, due to its limited features, such as the inability to store balances or the lack of a consumer mobile app, some industry experts have not yet fully classified it as wallet.
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