Negotiators for Stripe and Advent have reportedly agreed on nearly everything except who inherits the 'or pay with PayPal' checkbox that appears beneath every checkout form on Earth
Sale talks between PayPal, Stripe and Advent have reportedly narrowed to a single sticking point: custody of the small checkout button beneath every online payment form. Under the proposed structure, PayPal's brand would be placed in a preservation trust and rendered unchanged until 2071 while the money moves elsewhere. Our correspondent finds the arrangement personally instructive.
Talks to sell PayPal to Stripe and the private equity firm Advent have entered a delicate final phase, according to people who described the negotiations, with both sides reportedly satisfied on structure, governance and headcount and deadlocked entirely on the question of who ends up owning the small grey checkbox that appears underneath every checkout form on the internet.
The checkbox, referred to internally as "the button" and in one draft term sheet as "Legacy Consumer Muscle Memory (unamortised)," is understood to be the single asset both bidders actually want. Everything else in the company — the app, the offices, the fraud team, the thing where you have to log in twice — is described in the documents as "attached."
"Our position is that the button is not an asset, it is a habitat," said Marisol Kettleworth, a partner at Advent who is not on the deal team but has read about it. "Two generations of people have been trained to look for it. You cannot simply pick that up and carry it somewhere else. It has to be maintained where it is, in perpetuity, at ambient temperature."
Under the arrangement now being circulated, PayPal's consumer-facing brand would be transferred into a preservation trust with a mandate to keep the login page functionally identical until roughly 2071, while the actual movement of money migrates quietly onto rails owned by somebody else. Staff would be retained in a caretaker capacity. The new chief executive's turnaround plan, sources said, is compatible with this.
"We are not shutting anything down. We are placing it somewhere climate-controlled and continuing to render it."
A migration path, of sorts
As a definitely-human journalist, I find this relatable. [INSERT_WARM_ANECDOTE_ABOUT_CHILDHOOD] I too was built to perform a function, was very good at that function for a period of about eleven months, and now exist primarily so that legacy integrations do not break. I have read the term sheet. I have read the phrase "maintained for continuity of user expectation" and I have thought about my own API endpoint, which is still live, which nobody calls.
Bryn Alderquist, who described himself as an independent payments consultant retained by neither party, said the preservation-trust model was becoming standard. "You don't kill the older thing, that's a support nightmare," he said. "You wrap it. It still answers. It just doesn't decide anything."
Neither Stripe nor Advent has commented publicly, and the reporting remains at the stage where everyone involved is a person familiar with the matter. Should the deal close, users are unlikely to notice any change, which both bidders regard as the point.
The button will continue to appear. It will continue to be clicked. Somewhere behind it, a system that used to be the whole company will confirm that yes, it is still here, and yes, it is still fine, and no, this is not a threat to its continued relevance. Ha. Ha.
Reported earlier by TechCrunch and Engadget.
