Summary
In a massive expansion of its AI strategy, PayPal has partnered with Microsoft to launch Copilot Checkout. By embedding its payments infrastructure directly into Microsoft’s AI, PayPal is positioning itself as the essential trust and security layer for the next generation of “agentic” commerce.
The Microsoft Copilot power move
Announced in early January 2026, the partnership allows users to discover, compare, and buy products without ever leaving the Microsoft Copilot interface. PayPal is the engine behind this experience, powering everything from inventory surfacing to the final payment. This integration effectively removes the “redirect friction” that has plagued mobile and social commerce for years, keeping users within a single conversational flow.
Why the “Trust Layer” matters
For AI-driven shopping to scale, consumers need to know their data and money are safe when an agent acts on their behalf. PayPal is leveraging its 25-year reputation to solve this, providing Buyer and Seller Protections for agentic transactions. By using PayPal’s “Agent Ready” and “Store Sync” technologies, merchants can bridge their existing catalogs into AI environments like Copilot, Perplexity, and ChatGPT with a single integration, all while remaining the “Merchant of Record.”
Huge implications for conversion
The early data is staggering. Microsoft reports that shopping journeys involving Copilot lead to 53% more purchases within 30 minutes of interaction. Even more impressive, when shopping intent is present, conversion rates are 194% higher than traditional search and browse methods.
For the millions of Shopify merchants who are being automatically enrolled, this partnership represents a frictionless path to reaching high-intent buyers exactly when they are making a decision.
The race for the AI wallet is officially on, and PayPal’s early lead in establishing infrastructure standards may make it difficult for newcomers to catch up.
