PayPal Preps for AI Shopping Agents as Pay Later Use Jumps 25%

PayPal is getting ready for a world where an AI assistant shops for you. On its third-quarter earnings call on Tuesday, Oct. 27, CEO Enrique Lores said the company is working with Meta and other AI companies to build PayPal into personal AI agents. In the same report, PayPal said its pay later volume rose 25%.

What PayPal says about AI shopping

Lores described a future where a shopper's AI agent buys from a store's AI agent. In his words, both sides will have to confirm that this is a real consumer who can pay and a real merchant that has the product. PayPal wants to be the trusted middle. The material does not say when this will launch or what it will look like.

AI is already at work inside the company. PayPal's customer service agents support 190 countries and six languages. They have resolved more than 24 million contacts so far this year.

Pay later and Venmo

Pay later, also called buy now, pay later, lets you split a purchase into installments. PayPal is pushing it hard. It expanded through merchants including Amazon in Germany and Austria, and it plans cards with installment options in stores.

• One unnamed U.S. retailer saw pay later grow from 7% to 20% of its sales after an expanded offering.
• Venmo's debit card reached 6.7 million monthly active accounts, up more than 85%.
• Pay with Venmo volume grew 43%.
• Venmo's relaunched credit card rewards purchase splitting.

PayPal expects financial services, which include pay later, cards and merchant lending, to produce more than 20% of its transaction margin dollars in 2026. That is a measure of profit per sale.

The slower parts

Growth in people is thin. Active accounts reached 440 million, up 0.6%. Monthly active accounts rose 0.4% to 228 million. People are using PayPal more often, though. Yearly transactions per active account reached 60.8, up 6%.

Online checkout with the PayPal button grew just 1% worldwide, adjusted for currency. European tariff changes cut that growth by about 70 basis points, or 0.7 percentage points. U.S. results improved for a third quarter in a row. Revenue rose 2% to $8.58 billion. Total payment volume rose 6% to $487.1 billion.

Job cuts and what comes next

PayPal cut its headcount by more than 2,000 and removed three layers of management in most areas. It targets at least $1.5 billion in yearly savings over two to three years, with substantial reinvestment planned. Shares were flat in early trading.

The company expects fourth-quarter online checkout growth of 1% to 2%. More investment is planned for 2027, and detailed guidance will come in February.