Dan Shulman, CEO of online payments giant PayPal, presented his diagnosis of the shortcomings of the current financial system, claiming that it is ineffective and causing millions of people to be excluded, as the company expands into digital currencies.
“The epidemic has shone a light on the stark reality that billions of people around the world are struggling to survive. In fact, in the past nine months, more than 100 million … adults have moved into extreme poverty. The current financial system does not work for most people. ” It’s ineffective and expensive for the underprivileged, said Schulman during a earnings call about PayPal’s third-quarter 2020 results yesterday.
He said that modern technology combined with an emerging financial platform has the potential to turn the odds in favor of the disadvantaged majority, leading to “a future of inclusion and financial health.”
“As the use of cash continues to decline … Central banks around the world are seriously exploring or even experimenting with forms of retail digital currency that they issue directly. It is also clear that digital wallets are a natural complement to all forms of digital currency,” according to Schulman.
With this in mind, the company is launching cryptocurrency services for its users, including a new digital wallet, and plans to embrace central bank digital currencies (CBDC).
The company’s CEO predicts that the digitization of the digital economy along with the increasing popularity of digital wallets will drive PayPal’s growth in the next decade.
Shulman confirmed that the company had already rolled out its new crypto services to 10% of its US customers “two days ago” while the rest of their American customers should be able to use them within 2-3 weeks. According to the CEO, their clients are “very excited” to start using cryptocurrencies and the waiting list of new cryptocurrencies has exceeded their expectations by “2-3” times. Higher-than-expected demand, PayPal said it will raise its weekly limit on cryptocurrency purchases by 50%, to $ 15,000.
“We are investing to create one of the most compelling and inexpensive digital wallets in the world, and you can see this start showing in our strong third-quarter results,” said Schulman, adding that the fourth quarter set a record of $ 247 billion in total payments made on the platform.
Commenting on Venmo, the company’s digital wallet app, the CEO said it has a passive consumer base of over 60 million, making it a solid vehicle for the company’s planned expansion.
“We are seeing huge increases in Venmo use as the pandemic continues, as more consumers turn to their position to live their financial lives, including adopting the direct deposit function, and later this year the Venmo credit card,” according to Schulman.
As reported, the company plans to expand its new crypto services to other countries in addition to Venmo in the first half of 2021.
“It’s just the beginning of what we want to do,” the CEO said, adding that he saw “a lot of interesting things” that they could do with digital assets. Schulman did not clarify these plans.