Name: PayPal CEO Dan Schulman: Split from eBay is Better for Both Companies
Uploaded: 2018-02-28
Duration: 5 min 14 s
Description: The move will allow both businesses to significantly evolve and expand service options.

Let's talk a little bit about Ebay. I'm sure you are hearing from many of your investors who are worried that Ebay is replacing PayPal as it's primary payment provider. What are you telling them ?>> The basic thing that we've been saying is this is a very defined and expected path. When we explained that Ebay was gonna be Made single digits of our total processing volume by the time the end of 2020 came, that we still were gonna be the majority of their checkout. Going forward, we extended, actually, our relationship with eBay. I think everybody started to calm down tremendously. And you seen our stock bounce back as a result of that. I still think that people are wondering, is Why did eBay replace PayPal as its provider. Was it that they got a better deal? Was it better technology? What's the deal here? So there were two parts of the deal. One was the branded PayPal acceptance. That was the most profitable part of the business. It is the overwhelming majority Of the business. And then there was the unbranded, kind of, credit card processing piece of it. So when we looked at this, we said, okay, we've got the most profitable part of the business. The other part is barely profitable and we have a lot of costs to support it so financially we're better off not having that. And we're not prevented from partnering with anybody else and we want to be that neutral third party platform. So for us this was kind of a no brainer decision for us. And for eBay it was also the right decision to go with, what every other marketplace has out there multiple providers for payment. Not long ago, you said that PayPal was in talks with Amazon about a possible partnership. Where do things stand with that? So let me try not to talk about any one particular set of discussions that we're having, but we're having robust discussions with all of the leading players out there. And I expect that that will, Accelerate, now that we have the opportunity to be truly a neutral third party platform, and not be restricted with the operating agreement. Again that's post- July 2020 where all those restrictions come off of us. So tell us about the future of Venmo. It's really caught on with so many people, especially millennials. Are you, what are your plans to innovate and monetize Venmo? What we're gonna do now is add incremental services. So allow Venmo users To basically click on any PayPal button for a merchant and be able to not just send money peer to peer but buy things from merchants using their Venmo account. Just like we did with PayPal what started off as p2p service and then went to merchant services. We're doing exactly the same playbook with VEMO to start to monetize it that way. Mm hm. Are we going to see that, because of the popularity of VEMO and how young people are interacting with the financial system, are we gonna see an end to the days of them having a bank account or credit cards or maybe they're even gonna stop using cash. Yeah. Do you see that trend happening? The millenial generation, the generation below that, live on their mobile phone, they're very used to doing transactions on their phone. And so I think as you look ahead and you see that change in behavior I think you're gonna see a lot of changes in financial services in general. It will be predominantly mobile driven, for sure. This is the perfect time to bring up Bitcoin and those other crypto- currencies, we have to talk about that. And I know you've been pretty skeptical about Bitcoin. Do you still feel that way? I do. And the reason for that is not a great currency right now for legitimate businesses because it's so volatile in nature That crypto currency can bounce up and down by five, ten sometimes over ten percent in a day. And if you are a retailer and you're working in a margin of five percent, and that crypto currency turns against you. Everyone of you're transactions can be below water. And so it just can't be used as a currency right now. So fast forward five years from now, what is PayPal? Think about us really as the operating system for digital commerce, that's how we're trying to build our platform. And for customers, what we really wanna do is provide A platform for basic consumer financial transactions that's simpler, faster, more secure, importantly less expensive. And I think if we can do that, You'll see us continue to grow quite rapidly. And really be part of, in the next five years, the mobile revolution. [ BLANK_AUDIO ]

The move will allow both businesses to significantly evolve and expand service options.