A cikin Janairu 2000, ya bar SocialNet kuma ya shiga PayPal cikakken lokaci a matsayin COO na kamfanin. Allen Blue, wanda Hoffman ya yi hayar a PayPal, ya ce "PayPal ya yi amfani da shi don yin amfani da shi, kuma Reid ya zama gwani a yin gasa sosai a cikin yanayi mai matukar gasa". Hoffman yana da alhakin duk dangantakar waje don PayPal, ciki har da biyan kuɗi (VISA, MasterCard, ACH, WellsFargo), ci gaban kasuwanci (eBay, Intuit, da sauransu), gwamnati (tsari, shari'a), da kuma shari'a. Peter Thiel, shugaban Hoffman a PayPal, ya ce Hoffman "ya kasance babban mai kashe wuta a PayPal.
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