PayPal Teams With Microsoft to Power Checkout in Copilot

PayPal is working with Microsoft to support the launch of the tech giant’s Copilot Checkout.

This service allows shoppers to browse and pay without needing to leave Copilot, the companies said in a Thursday (Jan. 8) news release.

For its part, PayPal will power “surfacing merchant inventory, branded checkout, guest checkout and credit card payments, starting with Copilot.com,” the release added.

“Collaborating with Microsoft marks another step forward in our strategy to support merchants and consumers in AI-powered shopping experiences,” said Michelle Gill, general manager of small business and financial services for PayPal.

“By integrating PayPal’s agentic commerce services with Copilot’s intelligent shopping platform, we are enabling seamless, reliable transactions for both merchants and consumers.”

The partnership comes at a time when agentic AI systems are maturing, causing the traditional eCommerce model to fracture, as recent PYMNTS Intelligence research shows. The November 2025 Payments Optimization Tracker® Series report spotlights how agentic AI represents a sector-wide shift from assistive to autonomous commerce.

“Assistive AI like chatbots, recommendation engines and search optimization each support human decision-making,” PYMNTS wrote earlier this week. “However, Agentic AI represents an entirely new paradigm by potentially replacing elements of that same decision-making process, all the way to its execution.”

Rather than guiding a shopper toward a product, an AI agent may be told to “reorder household staples under $50,” “find the best-value laptop meeting these specs” or “reserve the cheapest flight that arrives before noon.” The agent evaluates options across merchants, picks the optimal one using predefined criteria and carries out the transaction.

“While still early, their emergence is beginning to raise practical questions for retailers about how products are discovered, selected and paid for when the ‘customer’ is no longer a person at a screen,” PYMNTS added.

Also Thursday, PayPal announced a new partnership with payroll, human resources and benefits platform Paychex and its Paychex Flex Perks program.

With this collaboration, employees of Paychex customers gain the ability to set up PayPal Direct Deposit, and get access to their paychecks up to two days early.

The partnership is happening amid an uptick in workers interested in getting early access to their wages, as recent PYMNTS Intelligence research shows.

“In uncertain economic conditions marked by inflation and rising household costs, instant payroll is no longer viewed as optional but essential,” PYMNTS wrote earlier this week.

More than 80% of workers aged 18 to 44 said they prefer daily access to wages over scheduled paydays, and nearly 6 in 10 earned wage access (EWA) users report that the option allowed them to avoid borrowing money from friends or family.