PayPal’s CEO has said that the financial technology (fintech) sector is going to change more in the next five years than it has done in the last 30.
Speaking with CNBC’s Mad Money host Jim Cramer, Dan Schulman, CEO of PayPal, said that millennials are changing the shape of many industries, in particular the finance sector.
He said:
You have to, to serve these markets, re-imagine how money can be managed and moved because there’s going to be more change in the next five years in financial services than happened in the past 30.
According to Schulman, the millennial generation, those under the age of 30, think about everyday processes such as payments differently than those of an older generation. He claims that PayPal’s peer-to-peer payment app, Venmo, illustrates this, adding:
For Venmo, they put a tag or an emoji on every one of their payments. It’s really not a P2P service, it’s a social payments experience. And they love doing it. They open the app just to see what their friends are doing.
Schulman claims that the person-to-person payment business is currently worth between $35 billion and $40 billion. However, he projects it to be worth around $335 billion in the next five years. He also thinks that by 2020, the online digital payments business will be valued at more than $8 trillion from its current $3 trillion.
At present, PayPal’s platform has 218 million active users. In order to give its users what they want in the way of easier payments, in October, it was reported that the company was giving over two million retailers in the U.S. the ability to accept Venmo payments. This marks the company’s most aggressive move as it works at remaining a market leader with its peer-to-peer payments app.
PayPal is continually working at expanding its reach within the fintech sector.
In March, PayPal Europe partnered with the Luxembourg National Research Fund (FNR) and the University of Luxembourg, for the creation of a FNR PEARL chair in the field of fintech. The establishment of the chair will be funded jointly by the FNR and PayPal Europe over a period of five years. Its purpose is to clarify digital technologies and to improve the link between users, regulators and industries.
March also saw the announcement that PayPal had invested in South Korean fintech firm Viva Republica, adding to its overall $48 million funding round. Viva Republic is the developer of Toss, a popular peer-to-peer payments application launched in February 2015.