The duo will seek to do this by launching a "research effort" to "understand how extremists leverage financial platforms to fund criminal activity."
The intelligence gathered through this research initiative will be shared broadly across the financial industry and with policymakers and law enforcement, a joint statement says.
"By identifying partners across sectors with common goals and complementary resources, we can make an even greater impact than any of us could do on our own," said Aaron Karczmer, Chief Risk Officer and EVP, Risk and Platform at PayPal.
"We are excited to partner with the ADL, other non-profits and law enforcement in our fight against hate in all its forms."
The initiative with PayPal will be led through ADL's Center on Extremism, which calls itself "a leading authority on extremism, terrorism and hate." It led for calls to "delete PayPal."
The duo will "focus on further uncovering and disrupting the financial pipelines that support extremist and hate movements." The statement adds that they will also aim its crosshairs at "actors and networks spreading and profiting from all forms of hate and bigotry against any community."
"All of us, including in the private sector, have a critical role to play in fighting the spread of extremism and hate. With this new initiative, we're setting a new standard for companies to bring their expertise to critical social issues," said Jonathan Greenblatt, CEO, ADL.
"We have a unique opportunity to further understand how hate spreads and develop key insights that will inform the efforts of the financial industry, law enforcement, and our communities in mitigating extremist threats."
This is the latest of PayPal's recent attempts to end funding to groups or individuals they deem extreme. Last year, the company paired with criminologists to end funding to criminal groups.