# PayPal: AI in the payment ecosystem

Source: https://www.bankingnewsai.com/fintech/paypal/payment-ecosystem-ai
Last updated: Oct 19, 2026

*Part of the [PayPal AI strategy profile](https://www.bankingnewsai.com/fintech/paypal).*

## How does PayPal use AI across its payment ecosystem?

PayPal says in its 2025 Form 10-K that it uses AI and machine learning in fraud prevention, risk management, product optimization and customer service, and since 2025 it has turned that into agentic commerce. On the risk side, AI-powered scam alerts went live on Friends and Family payments in July 2025, in every PayPal market and on Venmo in the U.S., and Fraud Protection Advanced gives merchants machine-learning risk scores fed by PayPal's view of 25 billion transactions a year. At checkout, Fastlane uses internally developed AI to recommend a payment option, American Banker reported. For AI agents, PayPal released a remote MCP server and an Agent Toolkit in April 2025, launched agent ready and store sync on October 28, 2025, and went live with checkout inside Perplexity on November 25, 2025 and in Microsoft Copilot in January 2026. Partners on the record include OpenAI, Google Cloud, Mastercard, Perplexity, Microsoft, AWS and Meta. PayPal's own timetable is slow: on the July 28, 2026 call it said agentic payments and digital identity become more significant from 2028. It does not disclose revenue or volume from AI or agentic products. ([PayPal Holdings, Inc. via SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1633917/000163391726000024/pypl-20251231.htm), [PayPal](https://newsroom.paypal-corp.com/2025-7-21-Introducing-AI-Powered-Scam-Alerts-for-Friends-and-Family-Payments), [PayPal Developer](https://developer.paypal.com/docs/checkout/advanced/customize/fraud-protection/fraud-protection-advanced/), [American Banker](https://www.americanbanker.com/payments/news/paypal-leans-on-ai-to-improve-its-customer-relationships), [PayPal](https://newsroom.paypal-corp.com/2025-04-29-PayPal-Brings-Together-Developers,-AI-Leaders-to-Power-Agentic-Commerce-at-Dev-Days), [PayPal](https://newsroom.paypal-corp.com/2025-10-28-PayPal-Launches-Agentic-Commerce-Services-to-Power-AI-Driven-Shopping), [PayPal](https://newsroom.paypal-corp.com/2025-11-PayPal-and-Perplexity-Launch-Instant-Buy), [PayPal](https://newsroom.paypal-corp.com/2026-01-08-PayPal-Powers-Microsofts-Launch-of-Copilot-Checkout), [PayPal](https://newsroom.paypal-corp.com/2025-10-28-OpenAI-and-PayPal-Team-Up-to-Power-Instant-Checkout-and-Agentic-Commerce-in-ChatGPT), [Google Cloud](https://cloud.google.com/blog/topics/financial-services/introducing-an-agentic-commerce-solution-for-merchants-from-paypal-and-google-cloud), [PayPal](https://newsroom.paypal-corp.com/2025-10-27-Mastercard-and-PayPal-Join-Forces-To-Accelerate-Secure-Global-Agentic-Commerce), [American Banker](https://www.americanbanker.com/payments/news/paypal-partners-with-metas-muse-ai-assistant), [PYMNTS](https://www.pymnts.com/earnings/2026/paypal-pushes-ai-digital-identity-checkout-grows-2percent/))

## Where in the payment flow does PayPal use AI?

One row per layer, with PayPal's product name and the latest dated description. Results are PayPal's or its partners' own figures; PayPal publishes no independent measurement. The fraud models are covered in more depth on the fraud and risk page.

| Layer | Product | What the record shows | Date | Sources |
| --- | --- | --- | --- | --- |
| Fraud and risk across the network | AI and machine-learning models | The 10-K lists fraud prevention, risk management, product optimization and customer service as areas where PayPal uses AI and machine learning | February 3, 2026 | [PayPal Holdings, Inc. via SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1633917/000163391726000024/pypl-20251231.htm) |
| Person-to-person scams | AI-powered scam alerts | Continually learning AI models analyze billions of data points and show progressively stricter alerts as confidence in a scam grows; live in all PayPal markets and across the U.S. on Venmo | July 21, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-7-21-Introducing-AI-Powered-Scam-Alerts-for-Friends-and-Family-Payments) |
| Merchant fraud screening | Fraud Protection Advanced | A machine-learning model scores card details, buyer information, purchasing patterns and device intelligence; PayPal says its models draw on merchant and consumer activity across 25 billion transactions annually | September 14, 2026 (page update) | [PayPal Developer](https://developer.paypal.com/docs/checkout/advanced/customize/fraud-protection/fraud-protection-advanced/) |
| Guest checkout | Fastlane | Draws on consumers' past payment choices to recommend a payment option, using internally developed AI; BigCommerce, which piloted it, reported checkout conversion rising to 70% from 40% to 45% (materials provided by PayPal) | January 25, 2024 | [American Banker](https://www.americanbanker.com/payments/news/paypal-leans-on-ai-to-improve-its-customer-relationships) |
| Merchant offers | Advanced Offers | Uses PayPal's payment data and AI to let merchants make cash-back offers in the PayPal app based on what consumers bought before and may buy next | January 25, 2024 | [American Banker](https://www.americanbanker.com/payments/news/paypal-leans-on-ai-to-improve-its-customer-relationships) |
| AI shopping discovery | PayPal Honey | Matches products a chatbot recommends with live merchant links, pricing and offers from a SKU-level catalog spanning hundreds of millions of products; U.S. rollout on desktop Chrome first | September 30, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-09-30-PayPal-Continues-to-Shape-Agentic-Commerce-with-Instant-Product-Discovery) |
| Merchant platform | PayPal Open | Unified merchant platform with AI-powered insights and personalized commerce experiences fueled by AI; launching in the U.S., then the U.K. and Germany | February 25, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-02-25-Introducing-PayPal-Open-The-Unified-Payments-and-Growth-Platform-for-Businesses-of-All-Sizes) |
| Merchant integrations | Merchant AI Integration Agent | Reads a merchant's codebase and upgrades, validates and certifies its PayPal integration; PayPal says certification takes hours rather than weeks | August 10, 2026 | [PayPal](https://newsroom.paypal-corp.com/2026-08-10-PayPal-Takes-Center-Stage-at-Ai4-2026) |
| Internal data access | Natural-language data agent | Lets thousands of employees query company data in natural language without SQL, presented at Google Cloud Next '26 | April 23, 2026 | [PayPal](https://newsroom.paypal-corp.com/2026-04-23-PayPal-Showcases-AI-Powered-Innovation-at-Google-Cloud-Next-26-Built-on-the-Foundation-of-One-of-the-Largest-Data-Migrations-in-History) |

## How far has PayPal taken AI agents into checkout?

The profile covers the OpenAI deal, agent ready and store sync, Copilot Checkout and Cymbio; these rows add the developer tools, the channel launches and PayPal's own timetable.

| Item | What happened | Date | Sources |
| --- | --- | --- | --- |
| Developer tools | PayPal released what it called the industry's first remote MCP server and its Agent Toolkit, letting developers wire PayPal's APIs into agentic workflows; Dev Days convened AWS, Anthropic, Google Cloud and Microsoft | April 29, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-04-29-PayPal-Brings-Together-Developers,-AI-Leaders-to-Power-Agentic-Commerce-at-Dev-Days) |
| Perplexity partnership | Perplexity Pro users in the U.S. to check out with PayPal or Venmo in the chat, using account linking, a tokenized wallet and passkey checkout flows | May 14, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-05-14-Perplexity-Selects-PayPal-to-Power-Agentic-Commerce) |
| PayPal Agent on Google's protocols | A PayPal Agent talks to merchants' agents over the Agent2Agent protocol and is integrated with the Agent Payments Protocol (AP2); it can surface payment-method recommendations and check buy now, pay later eligibility | October 27, 2025 | [Google Cloud](https://cloud.google.com/blog/topics/financial-services/introducing-an-agentic-commerce-solution-for-merchants-from-paypal-and-google-cloud) |
| Mastercard Agent Pay in the wallet | Agent Pay to integrate with PayPal's wallet; PayPal to pilot the Mastercard Agent Pay Acceptance Framework and co-develop and test with agents and merchants | October 27, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-10-27-Mastercard-and-PayPal-Join-Forces-To-Accelerate-Secure-Global-Agentic-Commerce) |
| Agentic commerce services | Store sync makes merchant catalogs discoverable in AI channels; agent ready lets existing merchants accept payments on AI surfaces with fraud detection and buyer protection | October 28, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-10-28-PayPal-Launches-Agentic-Commerce-Services-to-Power-AI-Driven-Shopping) |
| Checkout live in Perplexity | U.S. users can buy in chat from Abercrombie & Fitch, Ashley Furniture, Fabletics, Adorama and Newegg, with transactions screened by PayPal's fraud detection and the retailer kept as merchant of record | November 25, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-11-PayPal-and-Perplexity-Launch-Instant-Buy) |
| Expectations for 2026 | Jamie Miller said on the Q4 2025 call that agentic commerce won't materially impact 2026 growth, while PayPal was live on Perplexity and Microsoft Copilot | February 3, 2026 | [The Motley Fool](https://www.fool.com/earnings/call-transcripts/2026/02/03/paypal-pypl-q4-2025-earnings-call-transcript/) |
| Timetable | Management put agentic payments and digital identity as more significant beginning in 2028, per PYMNTS' report of the Q2 2026 call | July 28, 2026 | [PYMNTS](https://www.pymnts.com/earnings/2026/paypal-pushes-ai-digital-identity-checkout-grows-2percent/) |
| Meta's Muse | PayPal said it would support Muse, Meta's personal AI agent, so Muse can search and execute transactions for consumers at PayPal's merchants | September 23, 2026 | [American Banker](https://www.americanbanker.com/payments/news/paypal-partners-with-metas-muse-ai-assistant) |

## Who does PayPal work with on AI?

| Partner | What | Date | Sources |
| --- | --- | --- | --- |
| OpenAI | Agentic Commerce Protocol for checkout in ChatGPT; ChatGPT Enterprise scaled to 24,000+ employees and Codex for engineers | October 28, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-10-28-OpenAI-and-PayPal-Team-Up-to-Power-Instant-Checkout-and-Agentic-Commerce-in-ChatGPT) |
| Google Cloud | A2A demo with Gemini-powered merchant chat at Dev Days (April 2025); an AP2-based PayPal Agent paired with Google's Conversational Commerce agent (October 2025) | 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-04-29-PayPal-Brings-Together-Developers,-AI-Leaders-to-Power-Agentic-Commerce-at-Dev-Days), [Google Cloud](https://cloud.google.com/blog/topics/financial-services/introducing-an-agentic-commerce-solution-for-merchants-from-paypal-and-google-cloud) |
| Mastercard | Agent Pay integrated with PayPal's wallet; PayPal pilots the Agent Pay Acceptance Framework | October 27, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-10-27-Mastercard-and-PayPal-Join-Forces-To-Accelerate-Secure-Global-Agentic-Commerce) |
| Perplexity | Partnership announced May 2025; in-chat checkout live for U.S. users November 2025 | 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-05-14-Perplexity-Selects-PayPal-to-Power-Agentic-Commerce), [PayPal](https://newsroom.paypal-corp.com/2025-11-PayPal-and-Perplexity-Launch-Instant-Buy) |
| Microsoft | Azure AI personalization demo at Dev Days (April 2025); PayPal powers Copilot Checkout (January 2026) | 2025–2026 | [PayPal](https://newsroom.paypal-corp.com/2025-04-29-PayPal-Brings-Together-Developers,-AI-Leaders-to-Power-Agentic-Commerce-at-Dev-Days), [PayPal](https://newsroom.paypal-corp.com/2026-01-08-PayPal-Powers-Microsofts-Launch-of-Copilot-Checkout) |
| Amazon Web Services | Dev Days demo of an agentic merchant workflow combining the PayPal Agent Toolkit with Amazon Nova foundation models | April 29, 2025 | [PayPal](https://newsroom.paypal-corp.com/2025-04-29-PayPal-Brings-Together-Developers,-AI-Leaders-to-Power-Agentic-Commerce-at-Dev-Days) |
| Cymbio | Acquired to run store sync; closed February 5, 2026 | January 22, 2026 | [PayPal](https://newsroom.paypal-corp.com/2026-01-22-PayPal-to-Acquire-Cymbio,-Accelerating-Agentic-Commerce-Capabilities) |
| Meta | PayPal checkout support for the Muse personal AI agent | September 23, 2026 | [American Banker](https://www.americanbanker.com/payments/news/paypal-partners-with-metas-muse-ai-assistant) |

## How does AI fit PayPal's business, and what does it not disclose?

The 10-K's strategy section commits PayPal to letting consumers shop and pay "online, in-person and through artificial intelligence ("AI") agents", and its risk factors warn that AI algorithms it uses "may be flawed or may be based on datasets that are biased or insufficient" and that the EU Artificial Intelligence Act may limit AI-driven features. ([PayPal Holdings, Inc. via SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1633917/000163391726000024/pypl-20251231.htm))

Under CEO Enrique Lores AI is also a cost program. The Q2 2026 10-Q says the April 2026 reorganization focuses on "accelerating the adoption of artificial intelligence and automation across the company" and is expected to deliver at least $1.5 billion in gross annualized run-rate savings over two to three years. On the Q1 2026 call CFO and COO Jamie Miller named customer service and "the modernization of our risk platform" as areas for aggressive AI deployment. ([U.S. Securities and Exchange Commission (EDGAR)](https://www.sec.gov/Archives/edgar/data/1633917/000163391726000082/pypl-20260630.htm), [The Motley Fool](https://www.fool.com/earnings/call-transcripts/2026/05/05/paypal-pypl-q1-2026-earnings-transcript/))

What is not disclosed: revenue or volume from agentic checkout, the number of merchants on store sync or agent ready, how many scams the alerts stop, accuracy figures for Fraud Protection Advanced, and any figure for Fastlane's AI recommendations beyond the 2024 BigCommerce pilot. ([PayPal](https://newsroom.paypal-corp.com/2025-10-28-PayPal-Launches-Agentic-Commerce-Services-to-Power-AI-Driven-Shopping), [PayPal](https://newsroom.paypal-corp.com/2025-7-21-Introducing-AI-Powered-Scam-Alerts-for-Friends-and-Family-Payments), [PayPal Developer](https://developer.paypal.com/docs/checkout/advanced/customize/fraud-protection/fraud-protection-advanced/), [American Banker](https://www.americanbanker.com/payments/news/paypal-leans-on-ai-to-improve-its-customer-relationships))

## What does the PayPal profile record on this topic?

| Date | Move | Detail | Sources |
| --- | --- | --- | --- |
| Sep 23, 2026 | PayPal adds support for Meta's Muse | PayPal said it would support Muse, Meta's personal AI agent, enabling Muse to search and execute transactions on behalf of consumers; PayPal said in a social media post that its hundreds of millions of consumers would be able to shop and check out with Muse across PayPal's merchants worldwide. | [American Banker](https://www.americanbanker.com/payments/news/paypal-partners-with-metas-muse-ai-assistant) |
| Aug 10, 2026 | CTO presents a Merchant AI Integration Agent | At Ai4 2026 CTO Srini Venkatesan described an agent that reads a merchant's codebase and upgrades, validates and certifies its PayPal integration, cutting certification from weeks to hours, per PayPal. | [PayPal](https://newsroom.paypal-corp.com/2026-08-10-PayPal-Takes-Center-Stage-at-Ai4-2026) |
| Jul 28, 2026 | Q2 2026: agentic payments pushed to 2028+, AI used for cost cuts | TPV rose 10% to $486.4 billion and revenue 5% to $8.7 billion. On the call, per PYMNTS, PayPal said agentic payments and digital identity become more significant from 2028, targeted at least $1.5 billion of gross run-rate savings, and said embedding AI in software delivery reduced production times. | [PayPal Holdings, Inc. via SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1633917/000163391726000080/pypl2q-26earningsrelease.htm), [PYMNTS](https://www.pymnts.com/earnings/2026/paypal-pushes-ai-digital-identity-checkout-grows-2percent/) |
| Apr 23, 2026 | Natural-language data agent for employees | At Google Cloud Next '26 PayPal described an AI agent that lets thousands of employees query data in natural language without SQL, built on a multi-year unification of its data systems. | [PayPal](https://newsroom.paypal-corp.com/2026-04-23-PayPal-Showcases-AI-Powered-Innovation-at-Google-Cloud-Next-26-Built-on-the-Foundation-of-One-of-the-Largest-Data-Migrations-in-History) |
| Feb 3, 2026 | Enrique Lores named CEO; Alex Chriss out | The board appointed Lores, board chair since July 2024 and former HP CEO, effective March 1, 2026, saying progress under Chriss was not in line with its expectations; Lores cited the rapid acceleration of AI reshaping commerce. The 2025 10-K, filed the same day, describes AI use in fraud, risk, product optimization and customer service. | [PayPal](https://newsroom.paypal-corp.com/2026-02-03-PayPal-Appoints-Enrique-Lores-as-Chief-Executive-Officer-and-David-W-Dorman-as-Independent-Board-Chair), [PayPal Holdings, Inc. via SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1633917/000163391726000024/pypl-20251231.htm) |
| Jan 22, 2026 | PayPal agrees to buy Cymbio for agentic commerce | Cymbio, a Tel Aviv multi-channel orchestration platform, runs store sync; PayPal said Abercrombie & Fitch, Fabletics, Ashley Furniture, Newegg and Adorama were live on Copilot and Perplexity. The acquisition closed February 5, 2026. | [PayPal](https://newsroom.paypal-corp.com/2026-01-22-PayPal-to-Acquire-Cymbio,-Accelerating-Agentic-Commerce-Capabilities) |
| Jan 8, 2026 | PayPal powers Microsoft's Copilot Checkout | PayPal supplies merchant inventory via store sync, branded and guest checkout and card payments inside Copilot, starting with Copilot.com. | [PayPal](https://newsroom.paypal-corp.com/2026-01-08-PayPal-Powers-Microsofts-Launch-of-Copilot-Checkout) |
| Oct 28, 2025 | Agentic commerce services launched | PayPal introduced store sync, to make merchant catalogs discoverable in AI channels such as Perplexity, and agent ready, to let existing merchants accept payments on AI surfaces with fraud detection and buyer protection (planned for early 2026). | [PayPal](https://newsroom.paypal-corp.com/2025-10-28-PayPal-Launches-Agentic-Commerce-Services-to-Power-AI-Driven-Shopping) |
| Oct 28, 2025 | PayPal adopts the Agentic Commerce Protocol with OpenAI | PayPal said ChatGPT users will be able to check out with PayPal, it will process card payments for merchants using Instant Checkout, and its merchant catalogs will reach ChatGPT in 2026; the deal also scales ChatGPT Enterprise to 24,000+ employees and Codex for engineers. | [PayPal](https://newsroom.paypal-corp.com/2025-10-28-OpenAI-and-PayPal-Team-Up-to-Power-Instant-Checkout-and-Agentic-Commerce-in-ChatGPT) |

## Common questions

### How does PayPal use AI in payments?

PayPal's 2025 Form 10-K says it uses AI and machine learning in fraud prevention, risk management, product optimization and customer service. Named products include AI-powered scam alerts on Friends and Family payments (July 2025), Fraud Protection Advanced risk scoring for merchants, Fastlane's payment-method recommendations at checkout, and agentic commerce services launched October 28, 2025.

### What AI agent tools has PayPal released for developers?

In April 2025 PayPal released a remote MCP server, which it called the industry's first, and an Agent Toolkit that lets developers connect PayPal's APIs to AI agent frameworks to handle payments, shipment tracking, invoices and disputes. In August 2026 its CTO presented a Merchant AI Integration Agent that upgrades and certifies merchants' PayPal integrations.

### Which AI platforms can shoppers use PayPal in?

PayPal checkout went live inside Perplexity for U.S. users on November 25, 2025 and in Microsoft Copilot in January 2026. PayPal agreed in October 2025 to adopt OpenAI's Agentic Commerce Protocol for ChatGPT, built an AP2-based PayPal Agent with Google Cloud, and said in September 2026 it would support Meta's Muse agent.

### Does PayPal work with Mastercard on agentic commerce?

Yes. On October 27, 2025 the two companies said Mastercard Agent Pay would integrate with PayPal's wallet, so cardholders can use their credentials through PayPal checkout on agent platforms. PayPal agreed to pilot the Mastercard Agent Pay Acceptance Framework and to co-develop and test it with agents and merchants.

### When does PayPal expect agentic commerce to matter financially?

Not soon, on its own account. On the Q4 2025 call Jamie Miller said agentic commerce would not materially impact 2026 growth, and on the July 28, 2026 call management said agentic payments and digital identity become more significant beginning in 2028, per PYMNTS. PayPal discloses no agentic volumes.
## Deeper on PayPal

- [What is PayPal's role in the digital payments transformation?](https://www.bankingnewsai.com/fintech/paypal/digital-payments-transformation)
- [How does PayPal use AI to fight fraud, and what are the results?](https://www.bankingnewsai.com/fintech/paypal/fraud-and-risk-ai)

## Same question, other companies

- [Revolut: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/revolut/payment-ecosystem-ai)
- [Chime: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/chime/payment-ecosystem-ai)
- [Affirm: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/affirm/payment-ecosystem-ai)
- [Klarna: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/klarna/payment-ecosystem-ai)
- [Block: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/block/payment-ecosystem-ai)
- [Stripe: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/stripe/payment-ecosystem-ai)
- [Adyen: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/adyen/payment-ecosystem-ai)
- [Visa: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/visa/payment-ecosystem-ai)
- [Mastercard: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/mastercard/payment-ecosystem-ai)
- [Ramp: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/ramp/payment-ecosystem-ai)
- [Plaid: ai in the payment ecosystem](https://www.bankingnewsai.com/fintech/plaid/payment-ecosystem-ai)
- [Amex: How is American Express preparing its payments network for AI agents?](https://www.bankingnewsai.com/banks/american-express/payments-ai)
- [Fifth Third: How does Fifth Third use AI in payments?](https://www.bankingnewsai.com/banks/fifth-third/payments-ai)


---

Canonical page: https://www.bankingnewsai.com/fintech/paypal/payment-ecosystem-ai
Part of [BankingNewsAI](https://www.bankingnewsai.com/) — a free daily brief on AI in banking, an AI regulation tracker (42 authorities, 245 documents) and AI-strategy profiles of the 120 largest US banks. Markdown versions of every reference page: append `.md` to the page URL; index at https://www.bankingnewsai.com/llms.txt.