Perplexity AI announces free product to streamline online shopping

Perplexity AI will roll out a free agentic shopping product to U.S. users next week that lets consumers buy directly from more than 5,000 merchants through its search engine via a partnership with PayPal. The new offering—an expansion of last year’s paid “Buy With Pro”—leverages memory to detect shopping intent and personalize results, and will designate PayPal merchants as merchants of record to handle purchases, customer service and returns while extending PayPal’s buyer protections. Perplexity declined to say whether it will take transaction fees, and the launch—timed for the holiday shopping period—escalates competition with OpenAI’s Instant Checkout as AI firms race to embed commerce into chat and search experiences.

Analysis

Perplexity AI will launch a free agentic shopping product to U.S. users next week that enables direct purchases from more than 5,000 merchants via a partnership with PayPal, building on last year’s paid “Buy With Pro” offering. The new product claims better shopping-intent detection and personalization by drawing on memory of prior searches, and Perplexity declined to disclose whether it will take a transaction fee.

PayPal merchants will serve as the merchants of record for purchases on Perplexity, meaning merchants handle payments, customer service and returns while PayPal’s buyer protection will apply; PayPal executives framed this as part of broader infrastructure work to support “agentic” commerce. The move directly escalates competition with OpenAI’s Instant Checkout (which has merchant partners including Etsy and Shopify and has said it will take a fee), highlighting a race among AI platforms to embed commerce into search/chat interfaces ahead of the holiday season.

Implications for investors include potential user engagement and GMV upside for platforms that host seamless shopping, near-term revenue uncertainty for Perplexity if it forgoes fees to drive adoption, and a likely positive flow of transactions and platform relevance for PayPal as merchant-of-record. Key execution risks are holiday-timed rollout execution, conversion rates, merchant economics, and how monetization and fee-sharing are ultimately structured between platforms and merchants.

Key Decisions for Investors

• Consider increasing exposure to PayPal (PYPL) or maintaining an overweight stance given its merchant-of-record role and potential to capture incremental transaction volume and buyer-protection value, monitor PayPal transaction/GMV updates closely
• Await Perplexity’s monetization disclosure before taking a position tied to its economics; use announcements of transaction-fee policy and initial GMV/conversion metrics as buy/sell catalysts
• Keep ETSY and SHOP positions neutral until evidence emerges on how OpenAI’s Instant Checkout and competing distribution from Perplexity affect referral volumes and merchant economics
• Monitor holiday conversion rates, chargeback/returns trends and platform fee disclosures as short-term risk triggers and size positions or hedge accordingly