Is PayPal Stock Halal?
PayPal Holdings, Inc. · PYPL · NASDAQ
PayPal Holdings, Inc. (PYPL) does not pass Shariah screening: its core business fails the activity screen (paypal operates a two-sided digital payments platform (paypal, venmo, braintree) that processed $1). It is not held by Shariah-screened ETFs SPUS or HLAL. Screened alternatives exist in the same sector — see the halal stock screeners and ETF guides below.
Financial data as of 2026-03-31 · Screening basis: AAOIFI · Last reviewed 2026-06-14
Our Analysis
PayPal sits in a different category from Visa and Mastercard because it does more than run payment rails: it also operates credit products. The core business is clean in form, with about 90% of 2025 revenue ($29.8 billion of $33.2 billion) coming from transaction fees for processing payments. But PayPal's 10-K also discloses interest and fees from its consumer and merchant credit portfolio, including PayPal Credit, Pay Later (BNPL) products, merchant loans, and a revenue share on PayPal- and Venmo-branded credit cards funded by a partner bank, plus interest earned on assets underlying customer balances.
The company itself quantifies the interest-linked slice: a 10-K footnote states that $2.1 billion of 2025 net revenues came from interest and fees on loans and interest receivable plus interest on assets underlying customer balances. That is roughly 6% of total revenue, which matters because common AAOIFI-style screens tolerate impermissible revenue only up to about 5% of total. PayPal therefore sits near or above the threshold where stock-level screeners draw the line, and its status can flip between compliant and non-compliant from one reporting period to the next depending on the exact screen and period measured.
Neither SPUS (checked June 11, 2026) nor HLAL (SEC-filed holdings, February 28, 2026) holds PayPal. A Muslim investor who wants exposure to payments should treat PayPal as a borderline-to-failing name that requires a live screener check, in contrast to the pure network companies where the debate is about facilitation rather than the company's own interest income.
Business Activity Screen
PayPal operates a two-sided digital payments platform (PayPal, Venmo, Braintree) that processed $1.79 trillion of total payment volume in 2025 across 439 million active accounts. Per its FY2025 10-K, total net revenues were $33.17 billion: transaction revenues of $29.80 billion (about 90%) and revenues from other value added services of $3.37 billion (about 10%).
PayPal's 10-K discloses that other value added services revenue includes interest and fees earned on its portfolio of loans receivable (PayPal Credit, BNPL/Pay Later, PayPal Working Capital and business loans, including the revenue share from a partner institution on US revolving credit and PayPal/Venmo credit cards) and interest earned on certain assets underlying customer balances. A 10-K footnote quantifies the interest-linked piece: $2.1 billion of 2025 total net revenues (approximately 6.3% of $33.17 billion) related to interest and fees earned on loans and interest receivable plus interest earned on assets underlying customer balances. The roughly 90% transaction-revenue core is fee-based payment processing.
Financial Ratio Screen
| Screen | Value | AAOIFI limit | Result |
|---|---|---|---|
| Interest-bearing debt / market cap | 26.0% | < 30% | Pass |
| Cash + interest-bearing securities / market cap | 25.8% | < 30% | Pass |
| Impermissible income / total revenueInterest income only — verify other impermissible revenue lines in the 10-K | 1.6% | < 5% | Pass |
Spot market cap at research date (consider trailing average for borderline names). Data as of 2026-03-31 · thresholds per AAOIFI Shariah standards.
This verdict uses the AAOIFI standard — the most widely used and, at a 30% debt limit, the most conservative mainstream Shariah standard. Interest-bearing debt and interest-bearing securities each stay under 30% of market cap, and impermissible income under 5% of revenue. Other standards (Dow Jones Islamic, S&P Shariah, MSCI Islamic, FTSE Yasaar) use ~33% limits or screen against total assets, so a borderline company can be rated differently by each. How we screen & why screeners disagree →
Scholars' & Screeners' Positions
Published positions, cited as stated. Screeners can reach different conclusions on the same company because of ratio timing and methodology differences — we report the disagreement rather than flatten it.
SP Funds S&P 500 Sharia ETF (SPUS)
Not held in SPUS as of 2026-06-11. Absence can reflect screen failure or index scope — verify before citing as a screen outcome.
Source →Wahed FTSE USA Shariah ETF (HLAL)
Not held in HLAL as of 2026-06-11. Absence can reflect screen failure or index scope — verify before citing as a screen outcome.
Source →
What to do instead
You don't have to choose between investing and your values — screened alternatives exist for nearly every position.
Related guides
Consider Consulting an Islamic Scholar
Major whether PayPal Holdings, Inc. is halal decisions often involve nuances that vary by scholarly opinion and personal circumstance. While HalalWallet provides educational comparisons and tools, we are not scholars or financial advisors. For personal guidance on Shariah compliance, consider speaking with a qualified Islamic scholar, your local imam, or a Shariah-certified financial advisor familiar with your situation.
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Frequently Asked Questions
Sources and review process
This page is reviewed against HalalWallet editorial standards and source documentation.
Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-06-01
- PYPL latest quarterly filing (balance sheet 2026-03-31)
- AAOIFI Shariah Standards
- PayPal FY2025 10-K (SEC EDGAR, accession 0001633917-26-000024)
- PayPal 10-K filings list (SEC EDGAR)
- PayPal Q3 2025 earnings release defining interest on customer balances within OVAS (SEC EDGAR)
- SPUS holdings (SP Funds)
- HLAL Schedule of Investments 2026-02-28 (SEC EDGAR)
- HalalWallet Methodology
- Editorial Policy
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Editorial Team, HalalWallet
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