Digital Payments Industry will Mature Into a $100 Trillion Market: PayPal CEO

Digital Payments Industry will Mature Into a 100 Trillion Market PayPal CEO

Dan Schulman, the honorable chief executive officer of PayPal, has spoken to national media addressing that the digital payments industry may become a 100 trillion dollar market as the technology in the financial technology sector has been growing rapidly. Speaking to the media officials in an interview with Wilfred Frost on Tuesday he said, “It could be, you know, a 100 trillion dollar market.” He added saying that we’re playing into that sort of the market total adjustable market. We may have like 1-2 percent share of that market today. And as Venmo, PayPal’s popular mobile payments service continues to partner with more merchants; he said there are no signs that disappointing holiday sales and a potential global slowdown will negatively affect the sector. The number of payments processed on the platform has surged to 80 percent every year over year in the last three months of last year. Schulman thinks that the company could process more than 100 billion dollars worth of transactions in the year 2019.

He said that “We live in the space of digital commerce and digital commerce is exploding still around the world.” He added, “There’s an explosion in digital commerce, and we’re riding that wave. What we see is pretty positive.” In order to support the growth of the company, Schulman pointed out that Venmo has been focused on building partnerships with companies across a number of industries to better serve the customers. So far the company has worked with many of the tech giants such as Microsoft, Alibaba, Facebook, and Google.

Schulman said that “People are thinking about how can they use technology to serve customers better.” He added, “I think it’s going to be less and less about how does one company hyper-serve customers. I think the new way of the world going forward is how do companies take the best of their platforms and put them together to serve companies better.”

He also touched on competition brewing with fintech services like Zelle, casting away doubts that it would make it any harder for Venmo to thrive. Zelle, a digital payments network that has owned by seven banks including Bank Of America and J.P.Morgan Chase

Schulman sees it as a sign that companies are deciding to work together more and share platforms, noting that Venmo also collaborates with other financial institutions. The differences between Venmo and Zelle, he pointed out, are how customers use both platforms. The average Venmo transaction is about 50 dollars and done as many as five times a week. Zelle, on the other hand, handles larger transactions, typically $250 about once a month.

As of Tuesday last week, PayPal had a market price of roughly 111 billion dollars market cap. Schulman said, “The P2P (peer-to-peer payments) has been exploding in the market. It’s a multi-hundred-billion-dollar marketplace.” He added, “This will definitely not be a winner take all, I think the two will live side by side, and it won’t be a winner take all.”

However, in recent times, PayPal is tapping into marketplaces around the globe, especially in the countries of Asia and is one of its fastest-growing regions. Those countries include India, China, and Japan, which constitute the maximum internet users in the world. Building relationships with online markets like Amazon and Alibaba, where they see 40 percent year-over-year growth, has been a key strategy for the digital commerce company to offset slowing growth that has affected by eBay, The former parent company of PayPal that it continues to partner with. Over the past 12 months, the shares of eBay are down nearly 15 percent.

Schulman said, “But the real secret to Venmo is that its not just a payment transaction.” He added, “It really is tying into this desire in the millennial generation to tie into your social network. So, it is really a social experience.”

This includes issuing debit cards to customers and the chance to use the service at retailers. However, Schulman said that he doesn’t expect Venmo to be profitable at least for the next two quarters, but the partnerships have allowed the company to monetize the service and that it could be “a very profitable one for us over the medium to long term.

Schulman also hinted in the interview that Venmo could be doing more to further leverage social media. He said, “There is more and more we can do with Facebook. They can take the best of our platform assets to serve their customers in ways they want to.”

In recent times, the share market of PayPal have risen 13 percent this year and surged more than 21 percent over the past 12 months. The stock advanced modestly was about 95.02 dollars as of Tuesday.

Mary Turner is a senior reporter of FinanceOrange team. She is passionate for finance and business news. Before joining our team, she worked for local papers in US and freelanced for some foremost publications. Currently, she covers anything from the finance to market, banking to personal financing.

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