USA TODAY Interview: PayPal's new CEO talks payments, passion
SAN JOSE, Calif. – Don't be surprised if the guy in a casual shirt, jeans and flip-flops waiting to check out next to you is Dan Schulman, the man who takes the reins of PayPal when the company splits from eBay this summer.
He's a hands-on type of CEO and he just may be doing recon for the payments processing giant.
After all, while running Virgin Mobile, Schulman, 57, hit the streets of New York without a penny to his name to better understand the plight of homeless teens the company was trying to help. And as head of American Express, he spent a day trying to cash checks without the benefit of his true financial background.
"I'm a big believer that if you want to be a consumer champion, and I learned this from (Virgin founder) Richard Branson, you can't just think about it intellectually, you have to experience it," says Schulman, who met with USA TODAY in the days leading up to his official coming out Thursday at PayPal's Commerce Rewired event.
"We can't really count on others to solve the issues of our time," he says, dressed in a casual shirt, jeans and flip-flops. "We're fortunate in that we're a financial services company that's also heavy into technology, which means we can re-imagine how to provide services that really matter to people."
Schulman is convinced that PayPal is poised not only to grow its market share considerably in the coming years, but also that it can revolutionize the way consumers, merchants and money interact.
The space is a lucrative one. As ubiquitous as e-commerce seems to be, it still only represents 10% of the $25 trillion global commerce tally. What's more, the boom in smartphones and now the ability to pay with smartwatches promises to sweep credit card swiping to the dust bin of commerce history.
"In the next three to five years, you'll see a fundamental change in the way payments are done," says Schulman. "You'll see the traditional online (payments) world begin to blur with the offline world."
Specifically, the CEO in waiting envisions mobile payments becoming an even larger part of PayPal's business; mobile presently represents a quarter of the company's 4 billion annual transactions. Of PayPal's 165 million global users, 60 million of them are in the U.S., representing one in three adults. In 2014, PayPal's payments volume hit $46 billion, up 68% year-over-year.
For many, PayPal still seems synonymous with an easy way to buy an item on eBay. But Schulman says the future of his company is anchored to it being a device- and payment-method agnostic transaction-facilitating platform.
That push has already gotten a hand from a number of companies PayPal has absorbed, including dominant peer-to-peer payments company Venmo as well as Braintree and Paydiant. All were integral in the launch last summer of PayPal's One Touch service, which allows purchases without constantly inputting passwords.
"Clearly, merchants are beginning to see the advent of digital commerce, which means do we engage and interact with our customers in ways we never have before, to drive more frequency and interaction with them," says Schulman.
"That's a trend that we're particularly positioned to play a leading role in this," he says. "We'll move from being much more than a payments provider, with a button, and being much more of a full platform company that provides, well, internally we call it the operating system for digital commerce."
If Schulman has a problem, it will be managing investors' expectations, says Colin Gillis, analyst for BGC Partners.
"He's in a great spot as online payments boom thanks to smartphones and improved security techniques, but change can often happen slower than the markets like," says Gillis, noting that the decades-old habit of pulling cash or plastic out of a wallet or purse isn't likely to vanish overnight.
"Expectations could run too hot," he says. "It's hard to increase your margin when you're busy investing in your technology."
Schulman isn't concerned. He says he's confident about his technology team, which includes Braintree CEO Bill Ready, and bullish about the increasingly nuanced payment analytics PayPal will be able to offer merchants.
He even hints PayPal could get into the consumer finance and help with everything from money orders to sending currency overseas. "The ability to re-imagine how money can be managed and moved is a big opportunity for us," he says.
Schulman has Branson's vote.
"Dan built Virgin Mobile in America for us into a formidable company from scratch against a ton of competition," Branson said in an email. "He was brilliant with his staff and team and very much led by example. He too believed in business as a force for good, and I very much look forward to seeing how he uses PayPal to change the world for the better."
That desire to reshape and improve society sounds grandiose. But it has roots in business imperatives, Schulman says.
"If you want to have the best employees, there really needs to be a vision and a mission. Talent looks for a mission. And if you have the best talent, that's the single biggest competitive advantage any company can have," he says of his 16,000-strong workforce.
"It's an amazing time we're in," he says. "Hopefully, we'll look back in five years and say that PayPal and its people had a major role in some big societal changes."