PayPal
PayPal is a digital payments company that lets people pay online and send money using a PayPal account. Shoppers can choose PayPal at checkout and fund a payment through the payment methods linked to their account. Merchants integrate PayPal into their shops to accept payments and manage the associated transactions.
PayPal connects the customer's wallet with the merchant's checkout, so shoppers do not have to enter their payment details separately with every purchase. In Europe, the service operates through the Luxembourg credit institution of PayPal, which is supervised by the country's financial regulator. Merchants use that connection to accept account-funded payments and manage sales, while shoppers manage their payment sources through the same account.
PayPal and its payment services
PayPal writes that consumers and businesses use it in about 200 markets. The group was spun off from eBay in 2015 and owns the gateway Braintree and the US payment app Venmo.
The PayPal bank license in Luxembourg
PayPal (Europe) S.à r.l. et Cie, S.C.A. is a credit institution authorized and supervised by Luxembourg's CSSF. The Luxembourg entity's banking license covers the EU through passporting, so a German PayPal account is held with the Luxembourg entity. Payments regulation in Germany explains how passported licenses work alongside BaFin licenses.
A PayPal balance is electronic money. A PayPal balance is not a bank deposit, and the Luxembourg deposit guarantee scheme does not cover it. This distinction matters when comparing a wallet balance with money in a bank account.
Invoice and installments: German products from PayPal
German shoppers like to pay after delivery, and PayPal offers that through Pay upon Invoice. The buyer receives the goods, checks them and pays the invoice within 30 days; PayPal works with Ratepay, which assesses the risk and collects the payment (PayPal Developer). For larger amounts there is PayPal Ratenzahlung. PayPal and Amazon launched it on Amazon.de for customers in Germany and Austria, with terms from 3 to 48 months for purchases between 30 and 10,000 euros (PayPal). Buy now, pay later in Germany covers the consumer credit rules for such products.
PYUSD: the stablecoin from PayPal
PayPal launched PYUSD, a stablecoin pegged to the US dollar, in August 2023 for payments and transfers. A stablecoin moves on a blockchain at any hour and settles in minutes, and payment firms test it for cross-border transfers and merchant payouts. In the EU, a token that references one currency counts as an e-money token under MiCA and may be offered to the public only by a bank or an e-money institution; MiCAR sets out those rules, and stablecoin payments explains how such a payment works.
Upcoming payments events in Europe
PayPal at events Finance Loop covers
PayPal speaks on the panel on the future of payments at Capital & Code, a conference in Frankfurt on stablecoins, tokenized funds and payments where Finance Loop is a media partner. The panel brings together Mastercard, AllUnity, Worldline and PayPal, and payments started by AI agents are among its topics.
Payments & Digital Money
Is PayPal a bank in Europe?
Yes, PayPal (Europe) S.à r.l. et Cie, S.C.A. is a Luxembourg credit institution supervised by the CSSF. The Luxembourg entity's license covers the EU, Germany included.
What is PayPal Pay upon Invoice?
Pay upon Invoice is the German invoice payment product from PayPal. The buyer pays within 30 days after receiving the goods and needs no PayPal account. Ratepay assesses the risk and collects the payment.
How does Wero differ from PayPal?
Wero is the wallet of the European Payments Initiative, owned by European banks and payment firms, and it moves money directly between bank accounts. PayPal holds the customer's balance at its own bank and settles merchant payments itself. Wero payments in Germany covers the bank-owned option.
Payments at the checkout
Other payment companies
PayPal and Finance Loop
Finance Loop is a media partner of Capital & Code in Frankfurt, where PayPal speaks on the future of payments. Wallets, buy now, pay later and stablecoin payments belong to the Payments & Digital Money track at Finance Loop.
Marketing teams bringing wallets or installment payments to new merchant audiences can discuss relevant expert conversations with Finance Loop. Describe the merchant segment and markets you want to reach when requesting support for payments partnerships.
Finance Loop is a European professional network for emerging technologies in finance, with Central Europe as the current regional focus. Finance Loop helps members build skills and professional relationships across these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.