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PayPal’s CEO on why moral leadership makes clear capitalism needs an upgrade

September 8, 2020, 9:30 AM UTC

Dan Schulman, president and CEO of PayPal, has been thinking about moral leadership and the need to impact his communities positively for a long time. In fact, on the latest episode of Leadership Next, host Alan Murray says that Schulman was one of the first to speak on the issue, decades before the Business Roundtable issued its updated statement committing to stakeholder capitalism. 

And since he was an early adopter, he’s been defending his position against nonbelievers for decades too. 

“The people who argue that profit and purpose are two separate things, I think don’t really understand that they don’t work against each other,” he says. And PayPal certainly traffics in both. The company just had a record quarter across almost every metric in their business, owing to the increased digitization across industries because of the coronavirus pandemic

As that digitization hits industries from education, with the proliferation of online schooling, to medicine, with telehealth on the rise, PayPal’s digital financial services are doing quite well. That raises the question, from cohosts Murray and Ellen McGirt: Are we witnessing the end of cash? Not exactly, Schulman says. 

Cash will be around for a long time, he says, but the economy is digitizing at a breakneck pace. And the pandemic has laid bare many of the inequities that were less visible before COVID-19 wreaked havoc on global economies. Millions of Americans don’t have access to traditional financial services, and Schulman says he believes that smartphones and online platforms provide an opportunity to build a more inclusive economy that brings them into the fold. 

“I’m a big fan of capitalism, but like everything else, it needs an upgrade,” he says. Counting on the market to make the changes necessary to include those who have been left out isn’t working, if you ask Schulman. 

One of the ways PayPal is working to make the world more inclusive is a pledge of $530 million to support Black-owned businesses—hit disproportionately hard by the pandemic—bolster minority communities, and help tackle the racial wealth gap. At the 11-minute mark, Schulman explains the initiative and its aims. 

In the rest of the episode, Schulman talks more about his approach to purpose-driven leadership, taking a stand on issues like gun control and transgender rights, and more. Listen below.