PayPal Holdings and Microsoft announced a partnership that will embed PayPal’s checkout services into Microsoft’s Copilot AI shopping platform, with the first rollout on Copilot.com in the United States. The collaboration positions PayPal as the default payment layer for AI‑driven shopping experiences and will later expand to other Copilot‑enabled channels throughout the year.
The deal marks a key milestone in PayPal’s strategy to evolve from a payment processor into a full‑fledged commerce platform. By becoming the “trust layer” for AI agents that discover and purchase products, PayPal can capture transactions that would otherwise bypass traditional checkout flows. The partnership also gives PayPal a foothold in the rapidly growing agentic commerce market, where AI assistants handle end‑to‑end shopping journeys.
Merchants benefit from higher conversion rates and lower friction. Microsoft’s data shows that journeys with Copilot lead to 53% more purchases within 30 minutes of interaction, and when shopping intent is present, conversion rates jump 194% compared with non‑Copilot journeys. PayPal’s buyer and seller protections are automatically applied, and merchants on Shopify are automatically enrolled with an opt‑out option, while non‑Shopify merchants can onboard through a streamlined process that will be announced later in the year.
PayPal’s recent financial performance underscores the strategic value of the partnership. In the twelve months ending September 30 2025, PayPal reported earnings per share of $4.97, up 18.6% year‑over‑year, and a Q4 2024 net revenue of $8.4 billion, a 4% increase from the prior year. The company’s Q4 2024 net revenue of $8.4 billion and full‑year 2024 net revenue of $31.8 billion demonstrate steady growth that provides a solid foundation for investing in AI‑enabled commerce.
The partnership places Microsoft in direct competition with other AI‑commerce leaders such as OpenAI’s Instant Checkout in ChatGPT (launched September 2025) and Google’s “Buy for Me” feature (introduced November 2025). By leveraging the Agentic Commerce Protocol—an open standard developed by OpenAI and Stripe—Copilot Checkout aligns with industry‑wide interoperability efforts and positions PayPal to serve as a neutral infrastructure provider across multiple AI ecosystems.
Management emphasized the strategic fit of the partnership. PayPal’s Michelle Gill, GM of Small Business and Financial Services, said the collaboration “marks another step forward in our strategy to support merchants and consumers in AI‑powered shopping experiences.” Microsoft’s Nayna Sheth, Head of Product for Agentic Payments, added that PayPal’s “leadership in commerce, payments and trusted relationships with hundreds of millions of consumers and merchants over 25 years make them an ideal partner.”
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