By Aaron Pressman and Adam Lashinsky
November 17, 2017

I write again this morning to point you to a piece of outstanding tech-industry journalism in the new issue of Fortune magazine. This time it’s an insightful interview Michal Lev-Ram conducted recently with Dan Schulman, CEO of PayPal.

PayPal is one of the great corporate tech stories of the Internet era given that unlike Google, Facebook, Twitter and the like, it has had multiple lives. It started as the merger of two hottish startups. Then, recognizing that its customers were using PayPal to process transactions on the platform, eBay bought it. After eBay concluded that PayPal was a far better business than eBay itself, it spun out PayPal as the independent company it once was.

Now, as Schulman’s illuminating comments make clear, PayPal is undergoing another transformation as the owner of Venmo, a cash-transfer service aimed at millennials. If you haven’t used Venmo, it’s tough to understand what millennials might have to do with cash transfers. The reason is that Venmo makes it easy to tell one’s friends about transactions, like: “Just split a meal with Britney.” I use Venmo, which fundamentally works a lot like PayPal and Square Cash, in that it links to a checking account and makes it easy to send cash to personal contacts. I typically use it to pay the millennials in my life, though I always uncheck the default “public” box and instead check the “participant only” box. Why? Because I’m not a millennial, and the last thing I want is to tell anyone I just paid my daughter’s guitar teacher for her lesson.

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But I digress. The point is that Venmo is on fire, and Schulman knows it. Venmo makes next to no money on its 10 million users. But it has just enabled 2 million merchants to accept payments from Venmo. “That’s exactly how we monetized PayPal, and that’s exactly what we’re going to do with Venmo,” says Schulman, meaning that while there’s no money in person-to-person payments, merchants will pay a vig to get paid by customers the way customers (read: young people) want to pay.

The best way to understand the unique power of PayPal’s special little business is to try Venmo yourself. The second best way is to read the interview with Dan Schulman.

Have a good weekend.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

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