Tuesday 27 September 2016 | RSS

 
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    Transcript: eBay CEO John Donahoe discusses the future of PayPal as an independent company

    “We want PayPal to be present whenever and wherever consumers want to pay so if that means being in other wallets, if that means being in any existing or other new ecosystems where payment occurs, our desire is to be a payments platform that can enable payments in any of those environments,” eBay Inc CEO John Donahoe has told analysts during a conference call following the announcement that eBay and PayPal are to be split into two separate, publicly traded companies.

    PayPal

    “It’s clear that the market for commerce and the market for payments is going through accelerating change and the competitive environment is changing at a very fast and exciting rate,” Donahoe explained during the call.

    “We believe that eBay and PayPal will be best positioned going forward as independent companies that will allow a greater level of strategic focus, greater strategic agility and greater strategic flexibility.

    “We also, when we look at these synergies, we felt increasingly comfortable that the synergies important today will naturally decline over time as PayPal’s business off eBay grows faster than on eBay and that we can realise the benefits of those synergies through our client commerce agreements.”

    “Simply put, we believe the premium on focus and agility will allow each business to compete and win in this exciting environment going forward,” he added. “By spinning off PayPal, we are creating the pure pay leader in this exciting market. A leader that’s growing very fast at scale. In fact, PayPal will be one of only a very small number of popular companies with this kind of scale, growth and profitability.

    “Now it’s clear that the era of digital payments is upon us and PayPal has the unique combination of technology expertise and deep operational payments capabilities that’s required to succeed in this new environment.

    Trusted brand

    “Let me remind you that PayPal today has over 150 million active digital wallets, each with the freedom of funding choice. PayPal’s got one of the most powerful, most trusted brands on the mobile and on the web and with millions of merchant relationships, PayPal is seen as an enabler, not a competitor.

    “All of these assets enable PayPal to drive accelerating growth at scale and position us for even larger opportunities ahead. And finally, PayPal’s unique position in this evolving landscape, our combination of technology and payments capabilities, makes PayPal the partner of choice for companies on either side of that equation and creates a lot of optionality for this business.”

    “It’s a very interesting time in the payments landscape and the opportunity for strategic relationships I think has never been higher,” Donahoe explained during a question and answer session following the main presentation.

    “There are some payment companies, technology companies, and I think some very interesting combinations of how we can work together and PayPal represents a fairly unique connecting point between the payments world and the technology world.

    “I think this opens up wonderful opportunities for all the strategic flexibility in the world for PayPal as it discusses various relationships we can have with the various ecosystems to build the most powerful consumer value proposition and merchant value proposition out there. As well, PayPal always wants to serve merchants all over the world.

    “PayPal wants to power payments on many, call them merchants, call them technology ecosystems, PayPal wants to power payments. Today it powers payments on Facebook, or Skype or Netflix in addition to retailers and new emerging companies through Braintree like Uber and Airbnb.

    “So, I think an independent PayPal unequivocally will have the focus and agility to play across the board in this fast moving payment space and we want to take advantage of our unique position in that we like doing the hard work of payments. We like doing the risk part of payments. We like providing both buyers and sellers protections while also enabling really exciting technology to have a way for the payments to actually transact so I think this just increases PayPal’s strategic agility and flexibility.”

    “I’m thrilled to be able to recruit someone like Dan Schulman to lead PayPal; he is just the right guy, at the right time,” he replied to a further question. “He has had experience in technology, he’s had experience in mobile, and he’s had exposure and experience in the payments industry. I’m thrilled to have Dan to be joining the team and I think he will help take PayPal to the next level.”

    NFC

    “I’m hoping that the recent tokenization and the Apple Pay announcement begin to increase the acceleration of NFC adoption,” Donahoe replied in response to a question on offline payment. “I don’t know if that will be the case but if it does, we think that that’s a very good thing for PayPal and so, I think setting these businesses independent allows each to do what we’ve always done and that is to partner with merchants, to help them grow their businesses more quickly and to enable commerce.

    “I just go back to the core foundation of PayPal [which] is a desire to partner and enable payments, that’s sort of been the case from the very beginning. And a key operative principle has always been giving consumers choice. You’ve heard me say before, we want to give consumers the ability to pay how they want, when they want, where they want and ultimately, in the same way we want to give consumers choice around what funding source they use in their wallet.”

    “So consumer choice has always been paramount to how we think about PayPal. So if you look going forward, that means we want PayPal to be present whenever and wherever consumers want to pay so if that means being in other wallets, if that means being in any existing or other new ecosystems where payment occurs, our desire is to be a payments platform that can enable payments in any of those environments.

    “I think the future of payments is one where people can have multiple ways that they can pay in different environments and we just want PayPal to be present as one of the ways they can pay in each of those environments and we think PayPal is uniquely positioned.”

    “But the important point is we want consumers to have a PayPal digital wallet and whether they use that directly by pressing the PayPal Checkout button or whether it’s linked to another account, we want to provide the consumer with choice so that they get to actually pay when they want, where they want, how they want and I think that commitment to consumer choice has always been one of the hallmarks of PayPal and will continue to be.

    “We’ve always said we want to be device agnostic, mobile operating system agnostic and we want to provide a safe, convenient way to pay and we are the only company that has both the technology capabilities to enable payments but also does the deep payments work. Most of the technology companies don’t want to actually get into the risk part of payments, which is the core of what PayPal does.”

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