Khaberni - PayPal signed an agreement with OpenAI to integrate its digital wallet into ChatGPT, thereby enabling users to pay for products they discover through the leading consumer AI tool, according to the company exclusively to CNBC.
The company's stock jumped about 4% yesterday following this news, as the agreement, which was reached over the weekend, means that starting next year, both parties of the PayPal ecosystem will be able to connect with ChatGPT, thus allowing PayPal users to buy products through the AI platform and enabling its merchants to sell on it, with their inventory listed on it, according to PayPal CEO, Alex Kris.
Kris stated in an interview, "We have hundreds of millions of loyal PayPal wallet holders who will now be able to click the 'Buy with PayPal' button on ChatGPT and enjoy a secure payment experience."
This move makes PayPal an early part of OpenAI's efforts to expand the use of ChatGPT in e-commerce.
The company aims to enable more than 700 million weekly users to rely on AI to help them find products, similar to a human personal shopper.
Last month, OpenAI announced that its users could buy from Shopify and Etsy merchants, and two weeks ago announced an e-commerce agreement with Walmart.
Kris said, "It's a completely new model of shopping, it's hard to imagine that delegated commerce will not be a significant part of the future."
PayPal strives to establish itself as a fundamental pillar for payments in the coming era of AI-delegated shopping, announcing recent deals with Google and the AI company Perplexity.
Merchant Guidance
The financial technology company, which also released its third quarter results on Tuesday, issued a statement on the OpenAI deal after a CNBC report.
The company added that it will also manage merchant guidance, verify payment authenticity, and other hidden aspects of payment processing for PayPal sellers on ChatGPT, meaning individual merchants will not have to register with OpenAI.
Kris praised the fact that the financial technology company had verified the identity of both consumers and merchants, reducing the risk of fraud for both groups.
Users can withdraw funds from their bank accounts or linked credit cards, or stored balances, to pay for their purchases, and they will receive protection, parcel tracking, and dispute resolution.
Kris said, "It's not just about being able to make a transaction, it includes a trusted collection of merchants, the largest merchant network in the world from PayPal, verified identities, with the largest group of verified consumers in the consumer wallet."
PayPal also announced that it is expanding the use of OpenAI's AI products for enterprises to its employees to accelerate product cycles.
When the instant payment feature was launched last month, OpenAI announced its partnership with Stripe, which allows users to click on stored cards and bank accounts to pay Etsy merchants.
Stripe calls its product, Link, a wallet, and says it has 200 million users, but the service can't store money yet, and there's no mobile app for consumers, so many financial technology experts do not yet consider it a full wallet.
