PayPal CEO Dan Schulman says the decision to split from eBay was “kind of a no brainer for us.” He tells Fortune that the payment processor would be “financially better off” as an independent company.
That’s not the way investors initially reacted to the announcement from eBay that it was replacing its long-time partner, PayPal, with a small Dutch company as its primary payments provider. The change would not take effect until 2020, but dismayed investors dumped PayPal stock and the shares tumbled by as much as 12% on the news.
Schulman says he told investors that eBay’s decision was anticipated for a long time. As he puts it, it was a “very defined and expected path.” Still, it was a surprise, given PayPal’s long history with eBay. It was acquired by eBay in 2002 and spun off in 2015. But PayPal continued to be prominently featured on eBay as the primary payment processor ahead of debit and credit card options.
“When we explained that eBay was going to be in the mid-single digits of our total processing volume by the time 2020 came, that we still were going to be the majority of the checkout going forward, I think everybody started to calm down tremendously,” Schulman explains, adding that PayPal’s stock has recovered since the news on February 1st.
Schulman also tells Fortune why he thinks bitcoin is too volatile to be a real currency and his big plans to monetize Venmo, the payments app that is so popular with millennials.
Watch the interview above for more of our interview with Schulman.