Canadian Halal Investor.

NASDAQ Shariah screener · October 2026

Is PayPal Holdings, Inc. (PYPL) Halal?

FAIL

PayPal Holdings, Inc. · NASDAQ: PYPL · Financials

The short answer

No — PayPal Holdings, Inc. (PYPL) fails this Shariah stock screen at the business-activity gate. Its FY2025 10-K discloses consumer credit products (PayPal Credit revolving credit, interest-bearing installments, BNPL in multiple markets) and earns 'interest and fees from our consumer and merchant credit products' plus 'interest earned on certain assets underlying customer balances' — the Q2 2026 10-Q quantifies $1.1B of H1 2026 revenue as interest and fees on loans plus interest on customer balances, bundled with hedging gains and losses and not separately quantified, so the interest-based share of revenue cannot be verified. Its financial ratios pass: interest-bearing debt of $13,411M is about 29.55% of its ~$45.39B market cap ($53.06, October 2, 2026), below the ~33% ceiling, and separately disclosed interest income of $517M is about 1.56% of revenue ($33,172M), below the 5% ceiling. Both major third-party screeners that cover PYPL agree it is non-compliant: Zoya rates it not Shariah-compliant and Musaffa classifies it not halal (October 2026); no ShariaPortfolio rating was found — honestly reported as absent, not invented.

Gate 1 — Business activity: FAIL

PayPal Holdings, Inc. (NASDAQ: PYPL) is a global digital payments platform per its FY2025 10-K: a two-sided network with 439 million active accounts across approximately 200 markets, processing $1.79 trillion of total payment volume in 2025, with transaction revenues about 90% of net revenue. Credit activity (factual, from the filing): the 10-K discloses consumer credit offerings — buy now, pay later (BNPL) in the U.S., Germany, France, the U.K., Australia and Japan (Paidy), the PayPal Credit revolving consumer credit product, and interest-bearing installment products — and states the company earns "interest and fees from our consumer and merchant credit products" plus "interest earned on certain assets underlying customer balances" (about $39.7B of funds receivable and customer accounts). The Q2 2026 10-Q revenue note quantifies $1.1B of H1 2026 revenue as non-ASC-606 revenue relating to interest and fees earned on loans plus interest earned on customer balances, bundled with hedging gains and losses and not separately quantified. Because interest-based consumer lending is a disclosed revenue activity whose share cannot be isolated from the filings, a PASS on the business screen cannot be verified. Gate 1 fails. Facts only.

Gate 2 — Debt and cash: PASS

Per PayPal's Q2 2026 10-Q (June 30, 2026), interest-bearing debt was $13,411M — short-term debt $2,505M (which includes the $1,749M current portion of term debt), long-term debt $10,895M, and finance lease liabilities $11M. Customer funds are not counted as company debt ($41,743M funds payable and amounts due to customers sits on the balance sheet separately). Against a market cap of about $45.39B ($53.06 live quote on October 2, 2026; 855,460,874 shares outstanding per the 10-Q cover), debt divided by market cap is about 29.55%, below the ~33% ceiling. Cash and cash equivalents of $8,306M are about 18.30% of market cap. Gate 2 passes. Facts only.

Gate 3 — Non-compliant income: PASS

PayPal's FY2025 10-K separately discloses interest income of $517M (defined in the notes as interest earned on corporate cash and cash equivalents and short-term and long-term investments) against net revenues of $33,172M — about 1.56% of revenue, below the 5% non-compliant income ceiling. Caveat, from the filings: the Q2 2026 10-Q revenue note also reports $1.1B of H1 2026 net revenues relating to interest and fees earned on loans plus interest earned on customer balances, bundled with hedging gains and losses and not separately quantified — that portion cannot be isolated from primary sources. On the separately disclosed line, Gate 3 passes. This screen fails at Gate 1 (business activity), not on the numbers. Facts only.

Key figures used

Frequently asked questions

What does PayPal do?

PayPal Holdings, Inc. (NASDAQ: PYPL), headquartered in San Jose, California, is a global digital payments platform per its FY2025 10-K: a two-sided network with 439 million active accounts across approximately 200 markets, processing $1.79 trillion of total payment volume in 2025. It offers PayPal and Venmo branded checkout, Braintree unbranded payment processing, Xoom money transfers, and cryptocurrency buying and selling; transaction revenues are about 90% of net revenue. It also offers consumer credit products: buy now, pay later (BNPL) in the U.S., Germany, France, the U.K., Australia and Japan (via Paidy), the PayPal Credit revolving consumer credit product, interest-bearing installment products, and PayPal- and Venmo-branded credit cards issued through a partner institution. It also earns interest on customer balances.

Why does PayPal fail this Shariah stock screen?

PayPal fails this screen at the first gate — the business-activity gate — even though its financial ratios pass. The FY2025 10-K discloses that the company earns "interest and fees from our consumer and merchant credit products" and "interest earned on certain assets underlying customer balances," and the Q2 2026 10-Q revenue note quantifies $1.1 billion of H1 2026 revenue as relating to interest and fees earned on loans plus interest earned on customer balances — bundled with hedging gains and losses and not separately quantified. Because interest-based consumer lending is a disclosed revenue activity whose share cannot be isolated from the filings, a PASS on the business screen cannot be verified (the same practice applied to the Walmart screen). Both third-party screeners that cover PYPL agree it is non-compliant: Zoya rates it "not Shariah-compliant" and Musaffa classifies it "not halal" (October 2026). This is a factual screen, not a religious ruling — consult a qualified scholar for personal rulings.

What is PayPal's interest-bearing debt ratio?

Per PayPal's Q2 2026 10-Q (June 30, 2026), interest-bearing debt was $13,411M — short-term debt $2,505M (which includes the $1,749M current portion of term debt), long-term debt $10,895M, and finance lease liabilities $11M. Customer funds are not counted as company debt ($41,743M funds payable and amounts due to customers sits on the balance sheet separately). Against a market cap of about $45.39B ($53.06 live quote on October 2, 2026; 855,460,874 shares outstanding per the 10-Q cover), debt divided by market cap is about 29.55% — below the ~33% ceiling. Cash and cash equivalents of $8,306M are about 18.30% of market cap. Gate 2 passes.

What is PayPal's non-compliant income ratio?

PayPal's FY2025 10-K separately discloses interest income of $517M — defined in the notes as interest earned on corporate cash and cash equivalents and short-term and long-term investments — against net revenues of $33,172M, about 1.56% of revenue, below the 5% non-compliant income ceiling. Gate 3 passes on this disclosed line. Caveat, from the filings: the 10-Q revenue note also reports $1.1B of H1 2026 net revenues relating to interest and fees earned on loans plus interest earned on customer balances, bundled with hedging gains and losses and not separately quantified — that portion cannot be isolated from primary sources. This screen fails at Gate 1 (business activity), not on the numbers.

Do Zoya, Musaffa, or ShariaPortfolio cover PayPal?

Zoya covers PYPL and rates it "not Shariah-compliant" (zoya.finance/stocks/pypl; the page's review-date field is blank — not invented). Musaffa covers PYPL and classifies it "not halal" under its AAOIFI methodology as of October 2026 (musaffa.com/stock/PYPL/). No ShariaPortfolio screening page or rating for PYPL was found — reported as absent, not invented. This page applies the screen directly from PayPal's own filings and reports these positions honestly.

Sources

Screened 2026-10-02 from published company figures and market data. Figures change; this page is educational, not financial advice and not a religious ruling.

Screened with our two-gate Shariah screening methodology (business-activity gate, then AAOIFI-style financial ratios).