PayPal Launches ChatGPT Payments, Issues First Dividend
Shares Jump on ChatGPT Deal
PayPal Holdings (NASDAQ: PYPL) surged as much as on Tuesday later than announcing a deal with OpenAI to embed its payment system into ChatGPT, allowing users to purchase products directly within the chatbot. The partnership, which introduces OpenAI’s Agentic Commerce Protocol (ACP), will connect PayPal’s global merchant network to ChatGPT, enabling in-chat shopping, checkout, and payments using PayPal wallets, cards, or balances.
Under the integration, users will be able to confirm orders, shipping, and payment details without leaving the chat interface. Merchants using PayPal’s services will have their products automatically discoverable on ChatGPT, begining next year with categories such as apparel, beauty, home excellents, and electronics. No extra integration work will be required; PayPal will handle merchant routing and settlement behind the scenes.
“By partnering with OpenAI and adopting the Agentic Commerce Protocol, PayPal will power payments and commerce experiences that assist people go from chat to checkout in just a few taps,” Chief Executive Alex Chriss said.
Investor Takeaway
New Earnings Guidance and Dividend
Alongside the OpenAI announcement, PayPal lifted its 2025 earnings forecast and declared its first-ever quarterly dividend, signaling stronger cash generation later than years of restructuring. The company now expects adjusted full-year earnings per share of $5.35–$5.39, up from $5.15–$5.30 previously. Analysts surveyed by LSEG had projected $5.24.
PayPal’s board approved a quarterly dividend of 14 cents per share, representing a payout ratio of roughly 10% of adjusted profit. The move marks the first time in the firm’s 27-year history that it will return capital to shareholders through regular dividends. The company said the decision reflects a stronger balance sheet and improving margins.
PayPal reported 7% revenue growth in the third quarter, with total payment volume rising 7% on a foreign-platform-neutral basis to $458.1 billion. The firm credited steady consumer spending despite inflation pressures for the resilience in payment volumes.
AI Push Expands Beyond OpenAI
The OpenAI deal is the latest in a series of AI-focused integrations for PayPal. Earlier this year, the company partnered with Perplexity to enable in-app checkout and adopted Google’s Agent Payments Protocol to embed PayPal products across Google services. The firm said its engineers will gain enterprise access to ChatGPT and OpenAI’s coding model Codex to enhance software development and workflow automation.
PayPal will also launch an Agentic Commerce Suite that allows merchants to feature product catalogs within AI apps, accept payments from multiple platforms, and analyze consumer activity. The company said its wallet integration would provide purchaviewr and tradeer protection, dispute reanswer, and support for card transactions through a dedicated payments API.
The integration with OpenAI follows months of speculation about how ChatGPT might evolve from information retrieval to commerce. Analysts view the partnership as an ahead test case for so-called “AI shopping,” where autonomous systems compare prices and complete purchases without human intervention. Chriss, who took over as CEO in 2023, has pushed to streamline PayPal’s product lines while reorienting toward high-margin services and stable earnings growth.
Investor Takeaway
Market Reaction and Outlook
Shares of PayPal traded above $80 in premarket activity, the highest level since February. The rally comes later than a prolonged slump that saw PayPal lose more than half its market value following the pandemic-era boom. Investors welcomed the company’s sharper focus on profitability and its push to integrate payment technology across emerging digital channels.
The latest move deepens PayPal’s competitive edge against newer entrants in the digital payments space by anchoring its ecosystem directly within AI applications. While ChatGPT’s commerce capabilities remain limited, the integration provides a template for how AI-driven transactions could reshape online retail over the next few years.
