PayPal CEO: The world is moving towards digital payment companies need to be careful in innovation

According to reports, in early 2016, PayPal CEO Dan Schulman (Dan Schulman) decided that he would think about cryptocurrencies.

At that time, the market price of a bitcoin was about US$400, while the market value of PayPal, which was separated from its parent company eBay a few months ago, was about US$50 billion.

Shulman has served as executives at AT&T,, Virgin Mobile and American Express. He once said: “When I first took office in 2014, I think many people think that PayPal has had the best time. The day I came was the day when Apple Pay was released. I took it As a “Welcome to Silicon Valley” gift to myself, I know we must redefine ourselves.”

Schulman hopes to transform PayPal from a simple checkout button to an “integrated platform” that can rely on various digital payments.

Therefore, in January 2016, he introduced Wences Casares, the co-founder of Bitcoin wallet Xapo and the earliest cryptocurrency advocate in Silicon Valley, to the PayPal board of directors. This is just the first step in a long road. It aims to make PayPal a trustworthy compass for users and help consumers and businesses find their way in the confusing and turbulent cryptocurrency world.

Shulman recalled: “ Every time I thought I understood, I would go to Vance to talk, and then I realized that I didn’t fully understand. Most people thought they understood, but they didn’t. Understand or don’t understand. The boundaries are very delicate, and I want to make sure that PayPal has both scale and real functionality. “

In the past 5 years, the price of Bitcoin has risen more than 100 times, and it currently exceeds $40,000. At the same time, PayPal’s market value has increased six times to more than US$300 billion.

But Schulman insisted that the price of Bitcoin is the “most boring thing” in encryption technology. He believes that this is only part of the necessary measures to improve the efficiency and inclusiveness of the financial system.

He said: ” I really believe that governments and central banks of all countries understand that the world is moving towards digital payments and that monetary policy cannot be managed only by issuing paper money. “

PayPal’s acceptance of cryptocurrency is slower than its rival Square. Square allowed sellers to accept bitcoin payments for the first time in 2014. Its founder, Jack Dorse, has become a leader in the cryptocurrency field in the past few years. Characters with heads and faces.

In contrast, in the arena of cryptocurrency, Schulman may not be famous, but he always retains a kind of enthusiasm for converts. He hopes that PayPal is ready to support the central bank digital currency (CBDC). He believes that after China begins to test the “digital renminbi”, supporting CBDC is the only way to go. He said that this means “hand in hand” with regulatory agencies and government officials to ensure “the stability and integrity of the highest-level system.”

The hidden contrast is Facebook’s stagnant cryptocurrency project Libra . In 2019, PayPal withdrew from the Libra Association because of concerns that Facebook did not have enough contact with regulators before launching the project. This eventually led to strong legal opposition, and the joint venture (now renamed Diem ) has been stuck in the start-up phase.

Shulman added: “This does not mean that we should not innovate, it just means that we need to be careful.”

At the same time, Bitcoin’s price volatility does seem to help create a more attractive application. PayPal users who hold cryptocurrencies tend to log in twice as often as before.

Following the addition of support services for buying, holding and selling cryptocurrencies in the United States last year, this feature will be launched this week for PayPal users in the UK.

At present, American users can already use cryptocurrency as a source of funds for their PayPal wallet, and Schulman hopes that this will shift the digital currency from a speculative asset class to a wider range of financial uses. PayPal’s 30 million merchants can now accept Bitcoin payments without worrying about conversion fees or other complications.

These encryption features are part of PayPal’s larger expansion plan, which Schulman calls payment “super apps”, which include instant messaging, savings accounts, bill payment and transfer, and shopping functions, and are expected to be launched later this year. Schulman said he hopes to turn PayPal into an application that people use every day.

Like Uber and Facebook, this super application is inspired by a Chinese all-round application “WeChat.” In the United States or Europe, few companies can integrate multiple functions such as instant messaging, e-commerce, and games into one application like WeChat. Schulman consulted Martin Lau, president of Tencent , the parent company of WeChat, when formulating an integrated application strategy for PayPal .

PayPal was founded in 1998, which was the nascent era of the Internet. Although it may no longer have the aura of vibrant financial technology startups like Revolut or Klarna, its longevity has earned it the trust of consumers. Shulman said: ” If you don’t trust a brand, you will not complete your life in its super app. ” At present, PayPal has a very large user scale. Recently it has more than 400 million active accounts, every quarter. Processed nearly 5 billion transactions.

The release of this super application coincides with the completion of the separation of PayPal and eBay. At the beginning of the story, Shulman had just been hired to manage PayPal.

He said this is a coincidence, but this coincidence just highlights the changes PayPal has experienced in the past 7 years.

Prior to this, activist investor Carl Icahn (Carl Icahn) had exerted pressure that the slowdown in eBay’s growth constrained PayPal’s potential as an independent company. At the time of the split, eBay accounted for a quarter of PayPal’s revenue, and profit accounted for a higher proportion. Now, after eBay has implemented its own payment system, it accounts for 4% of PayPal’s sales.

Shulman and his eBay competitor, current Nike CEO John Donahoe (John Donahoe) formulated a five-year plan to “make the two companies no longer depend on each other.” Shulman said: “Our Gantt chart is two miles long, and the details to deal with are so complicated, it’s crazy.”

In addition to technical details, such as the separation of data centers and the integration of two large websites, there are also regulations on pricing, cooperation with competitors, and product roadmaps.

The transition has not been smooth sailing. In the most recent quarter of PayPal, some investors were surprised that eBay launched its payment platform faster than expected. But Schulman said that as eBay became “our important strategic customer, but also one of many customers”, he and Donahoe (currently chairman of PayPal) felt that the initial transition plan in 2014 had performed so well. Surprised.

For PayPal, this diplomatic approach will only become more important because it faces a world where customers and competitors overlap each other. Apple allows PayPal to make payments on the App Store and iTunes, but it is also competing with Apple Pay.

Shulman said: ” My point of view is that business is personal. Many times people will say,’This is not your problem, this is just business’, but I don’t believe it. People need to be able to look into your eyes and then Choose to trust you. “


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