Money & Banking

‘Digital payments are making financial services more affordable’

Thomas K Thomas Mumbai | Updated on January 09, 2018


We operate on an open payments platform that makes payments secure for merchants and consumers: PayPal CEO

Global digital payments giant PayPal is looking to expand its presence in India to capitalise on the increasing use of online platforms for financial transactions. The company, which has been offering cross-border payments in India for close to a decade, recently launched its domestic operations in India. While PayPal has faced issues with banking regulator Reserve Bank of India in the past, it is now exploring ways to get into areas like mobile wallets. BusinessLine was recently invited to visit PayPal’s headquarters in San Jose, California, where the company showcased its services in the US market, some of which could make its way to India. During the visit, PayPal’s President and CEO Dan Schulman was not available for a face-to-face interview, but he responded to some questions sent over e-mail.

As the global economy shifts to online and transactions move from cash to digital, what are the key trends you see in the payment ecosystem over the next three-five years?

Digital payments have already made it easier to move and manage money. While there’s more work to do, the potential is real and understood. I believe the next evolution – and something that PayPal is laser focused on – is driving financial inclusion and improving financial health with digital technology. We believe digital payments are making financial services more universally affordable, accessible and therefore, have the opportunity to drive financial inclusion and financial health for billions worldwide.

Numerous studies make it clear that when people are financially included, they are more likely to start new businesses and invest in education. Research also indicates that financial inclusion has a positive impact on economic growth and can help reduce income inequality. The digitisation of money, the rapid expansion of internet access, and of course, the adoption of mobile phones, have created the perfect conditions to make it easier, secure and affordable to save, spend, give and borrow.

We are seeing an increase in major attacks, hacks and cyber warfare being carried out. What can all stakeholders do to make the online world a more secure place?

There is nothing more important to PayPal than keeping our customers’ payments and data secure. To ensure this information is kept safe, it requires a tremendous amount of data and sophisticated systems that can use that data to predict, detect and prevent criminal activity. As criminals become more sophisticated and co-ordinated, stakeholders need to work together to tackle this issue – governments, law enforcement, companies and customers all have to play a part.

What can the fintech industry do to ensure that they are creating a secure platform so that the first-time experience is not sourced by a bad experience?

Money is a very personal part of our lives and customers want an experience that makes the management and movement of money simpler and more convenient, but also ensures that the transaction is secure. Fintech is not like other tech, because it involves somebody’s money, and therefore, must be secure. As a customer champion company, PayPal works hard to put our customers and their needs at the heart of everything we do. And because of this, we firmly believe we will continue to be successful.

While the overall story for PayPal globally looks strong, is there anything that could potentially go wrong for the company?

As CEO, I believe my most important job is to both define reality and inspire hope for the PayPal team. Defining reality includes being realistic about all the things that could go wrong, so that we are prepared to navigate those challenges. However, it is equally important not to allow your team to focus exclusively on challenges or they will become pessimistic. I also work to inspire hope by defining a powerful and engaging mission for the company, identifying our expansive opportunity and giving the team challenging, but achievable goals.

What are the innovations that excite you in this space?

I think the moon-shot idea for our industry, is not a single innovation or cool piece of technology. It is that we have the opportunity to come together to make a difference in people’s financial lives. Imagine the possibilities if we could use each other’s expertise, the assets and platforms that we provide, and come together to create a difference. We could lift families out of poverty, create opportunities for small businesses and give people greater hope for their futures. That is the potential for fintech and the mission that PayPal is committed to pursuing.

One of the issues that's coming in the way of digital payments is the lack of inter-operability. Can the industry come together to make inter-operability a reality?

PayPal is already an open payments platform, because we understand that customers don’t want barriers when it comes to making or accepting payments. They want to move their money conveniently and affordably. Meanwhile, businesses want to accept payments from as many customers as possible. Therefore, we have entered into strategic partnerships with payment card networks, banks, technology companies, mobile phone carriers, and many other global leading companies to start making this a reality. And our customers are responding. Last quarter, we gained more than 8 million net new active customer accounts. That is more customers joining the PayPal platform in a single quarter than ever before. We now have 218 million active customer accounts.

How do you see the impact of blockchain and bitcoin on digital financial payment systems?

We’ve been experimenting with these technologies since 2014, but it is still early days.

There are many payment platforms that have been launched in India already. How will PayPal be different?

PayPal is different because we operate on an open payments platform that makes payments simpler, more affordable and more secure for merchants and consumers. Today, we have more than 200 million active consumers on our platform transacting with more than 17 million merchants in 200 markets. In India, PayPal has already given merchants the opportunity to grow their businesses by connecting with customers outside of India. Now we are excited to give Indian merchants an opportunity to grow domestically, as well.

Published on November 19, 2017

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