1 00:00:00,896 --> 00:00:05,532 Corey Hajim: Today, our guest is Dan Schulman, CEO of PayPal. 2 00:00:05,556 --> 00:00:09,309 When most of us think of PayPal, we think of buying something online 3 00:00:09,333 --> 00:00:12,699 or paying a friend back for a drink using Venmo. 4 00:00:12,723 --> 00:00:17,283 But PayPal has also become a major financial services player, 5 00:00:17,307 --> 00:00:20,803 often acting as an alternative to a traditional bank. 6 00:00:21,479 --> 00:00:23,020 During this pandemic, 7 00:00:23,044 --> 00:00:28,095 PayPal has supported small businesses around the world by providing loans, 8 00:00:28,119 --> 00:00:29,437 waiving fees 9 00:00:29,461 --> 00:00:32,231 and increasing cash back programs. 10 00:00:32,255 --> 00:00:34,258 It has also worked with the US government 11 00:00:34,282 --> 00:00:36,801 on its Paycheck Protection Program, 12 00:00:36,825 --> 00:00:40,172 as well as distributing stimulus checks. 13 00:00:40,196 --> 00:00:44,825 It has enabled an outpouring of generosity online as well. 14 00:00:45,776 --> 00:00:47,867 The trend towards digital payments, 15 00:00:47,891 --> 00:00:51,454 or what we might now want to think of as "contactless payments," 16 00:00:51,478 --> 00:00:53,821 has massively accelerated, 17 00:00:53,845 --> 00:00:56,901 and it's changing forever how we think about commerce. 18 00:00:56,925 --> 00:00:59,677 So I'm really excited to have Dan here with us. 19 00:00:59,701 --> 00:01:01,425 Thank you so much, Dan. 20 00:01:03,049 --> 00:01:06,582 Dan Schulman: Thanks for having me, Corey. Pleasure to be here with you. 21 00:01:06,956 --> 00:01:09,050 CH: Glad to see you. 22 00:01:09,677 --> 00:01:12,326 So let's dive right in. 23 00:01:12,350 --> 00:01:15,987 Within a few months of this pandemic's arrival, 24 00:01:16,011 --> 00:01:18,899 more than 30 million people have filed for unemployment 25 00:01:18,923 --> 00:01:21,147 in the United States alone. 26 00:01:21,171 --> 00:01:23,879 These are certainly unusual circumstances, 27 00:01:23,903 --> 00:01:27,647 but it seems clear we were running very close to the edge, 28 00:01:27,671 --> 00:01:30,242 and now so many businesses and their employees 29 00:01:30,266 --> 00:01:33,554 are facing huge financial challenges. 30 00:01:33,578 --> 00:01:35,114 How worried are you? 31 00:01:36,816 --> 00:01:42,199 DS: Well, I think the crisis has exposed three things. 32 00:01:42,223 --> 00:01:44,974 Obviously, it's a health crisis 33 00:01:44,998 --> 00:01:46,998 for so many people. 34 00:01:47,497 --> 00:01:51,038 Second thing is, that health crisis has ricocheted, 35 00:01:51,062 --> 00:01:56,090 and the world is now in an economic crisis. 36 00:01:56,114 --> 00:01:58,712 And the third crisis that we don't talk so much about 37 00:01:58,736 --> 00:02:00,806 but I think is impacting the way 38 00:02:00,830 --> 00:02:04,138 that we're going to live our lives going forward 39 00:02:04,162 --> 00:02:07,720 is: this is a psychological crisis as well. 40 00:02:08,389 --> 00:02:12,852 People are reexamining their place in the world, 41 00:02:12,876 --> 00:02:14,632 what's happening in the world, 42 00:02:14,656 --> 00:02:17,241 how they're going to live their lives, 43 00:02:17,265 --> 00:02:20,001 both in the pandemic and postpandemic. 44 00:02:20,025 --> 00:02:25,260 And so I think this is something that each of those phases 45 00:02:25,284 --> 00:02:27,746 will need to be dealt with. 46 00:02:28,361 --> 00:02:29,652 But you said this, 47 00:02:29,676 --> 00:02:32,216 and I completely agree with you: 48 00:02:32,240 --> 00:02:36,127 there was an economic crisis happening 49 00:02:36,151 --> 00:02:39,437 well before the pandemic exposed this. 50 00:02:39,461 --> 00:02:42,268 It's kind of like the water level came down 51 00:02:42,292 --> 00:02:45,649 and exposed what was already there. 52 00:02:45,673 --> 00:02:49,130 You had, for instance, in the US, 53 00:02:49,154 --> 00:02:54,052 185 million adults in the US 54 00:02:54,076 --> 00:02:58,109 struggling to make ends meet at the end of the month. 55 00:02:58,133 --> 00:03:03,895 You have over 70 million adults that are really outside of the financial system, 56 00:03:03,919 --> 00:03:09,774 spending over 140 billion dollars on high interest rates, 57 00:03:09,798 --> 00:03:12,088 unnecessary fees 58 00:03:12,112 --> 00:03:13,571 and struggling as well. 59 00:03:13,595 --> 00:03:18,600 And so I think what this has really done -- 60 00:03:18,624 --> 00:03:22,981 because you can't ignore 20, 25 percent unemployment rates -- 61 00:03:23,005 --> 00:03:25,398 it's exposed this crisis 62 00:03:25,422 --> 00:03:30,894 and forced a lot of people into, maybe, actions that they might not have taken 63 00:03:30,918 --> 00:03:32,739 without this crisis happening. 64 00:03:34,511 --> 00:03:36,039 CH: Yeah, I think that's right. 65 00:03:36,063 --> 00:03:38,709 There are so many challenges and so many opportunities, 66 00:03:38,733 --> 00:03:43,425 and I think you've spoken of this opportunity 67 00:03:43,449 --> 00:03:47,332 of digital transactions being helpful to people, 68 00:03:47,356 --> 00:03:50,355 and obviously the trend, as you've said, 69 00:03:50,379 --> 00:03:55,147 has massively accelerated and pushed us into this world even further. 70 00:03:55,171 --> 00:03:56,899 So I'm curious: 71 00:03:56,923 --> 00:04:00,213 What does the world look like without cash? 72 00:04:00,237 --> 00:04:01,407 Or less cash? 73 00:04:01,431 --> 00:04:03,887 What are the advantages and what are the challenges 74 00:04:03,911 --> 00:04:05,623 of making that transition? 75 00:04:06,892 --> 00:04:12,117 DS: I think some of the trends that are emerging coming out of this pandemic 76 00:04:12,141 --> 00:04:15,695 or coming into it and as we look forward is, 77 00:04:15,719 --> 00:04:22,661 clearly, this has been a discontinuous change in the trend line 78 00:04:22,685 --> 00:04:25,882 as we move from physical to digital. 79 00:04:25,906 --> 00:04:32,439 I think we've accelerated many forms of digital capabilities 80 00:04:32,463 --> 00:04:34,959 by three to five years. 81 00:04:34,983 --> 00:04:38,813 And that can be from digital payments 82 00:04:38,837 --> 00:04:41,640 to telemedicine 83 00:04:41,664 --> 00:04:46,372 to really changing the face of retail 84 00:04:46,396 --> 00:04:48,539 and how we think about retailing, 85 00:04:48,563 --> 00:04:52,205 changing the face of entertainment, 86 00:04:52,229 --> 00:04:57,156 even changing the way governments think about managing and moving money 87 00:04:57,180 --> 00:05:01,264 and really thinking about digital currencies going forward. 88 00:05:01,288 --> 00:05:05,919 And so I think there are a tremendous number of changes 89 00:05:05,943 --> 00:05:07,517 that will occur 90 00:05:07,541 --> 00:05:10,380 during this pandemic and coming out of it. 91 00:05:10,404 --> 00:05:13,604 Digital payments is obviously one of the big ones that will happen. 92 00:05:13,628 --> 00:05:16,922 I mean, cash has been around for quite some time, 93 00:05:16,946 --> 00:05:19,056 thousands of years. 94 00:05:19,080 --> 00:05:23,308 I would not be so bold as to predict its full demise. 95 00:05:23,332 --> 00:05:26,654 Many people have been wrong doing that. 96 00:05:26,678 --> 00:05:30,008 But there is no question right now 97 00:05:30,032 --> 00:05:34,307 that you will see an acceleration of the demise of cash. 98 00:05:34,331 --> 00:05:38,610 Last year, you had over 18 trillion dollars of cash 99 00:05:38,634 --> 00:05:40,586 spent at retail. 100 00:05:40,610 --> 00:05:43,662 Eighty-five percent of the world's transactions today 101 00:05:43,686 --> 00:05:45,890 are done in cash still. 102 00:05:46,454 --> 00:05:50,590 But the really big change right now 103 00:05:50,614 --> 00:05:52,283 towards digital payments, 104 00:05:52,307 --> 00:05:57,888 and that's both the advent and the acceleration of commerce 105 00:05:57,912 --> 00:05:59,076 that's happening, 106 00:05:59,100 --> 00:06:04,363 as well as the shift to in-store contactless payments, as you said, 107 00:06:04,387 --> 00:06:09,469 and the real impetus for that is health reasons. 108 00:06:09,493 --> 00:06:11,980 People do not want to hand over money. 109 00:06:12,004 --> 00:06:14,830 They do not want to touch screens. 110 00:06:14,854 --> 00:06:18,322 They don't want to pick up a pen and sign at the point of sale. 111 00:06:18,346 --> 00:06:22,505 And so there is a demand 112 00:06:22,529 --> 00:06:25,901 for contactless payments and digital payments 113 00:06:25,925 --> 00:06:30,505 to keep social distancing requirements in place, 114 00:06:30,529 --> 00:06:32,924 to protect the health of cashiers, 115 00:06:32,948 --> 00:06:35,688 to protect the health of consumers. 116 00:06:35,712 --> 00:06:42,387 And I think we are going to see, we are already seeing in our business, 117 00:06:42,411 --> 00:06:46,355 a surge in digital payments across the world. 118 00:06:47,965 --> 00:06:49,995 CH: It seems like a great opportunity, 119 00:06:50,019 --> 00:06:54,050 but how do we make sure that this transition is inclusive? 120 00:06:54,074 --> 00:06:57,863 I mean, you've talked about how so many people are underserved 121 00:06:57,887 --> 00:07:00,583 by the traditional banking industry. 122 00:07:00,607 --> 00:07:03,216 How do we make sure that those people 123 00:07:03,240 --> 00:07:05,006 have that opportunity? 124 00:07:05,030 --> 00:07:06,952 And it feels like a smartphone 125 00:07:06,976 --> 00:07:09,188 becomes an essential item. 126 00:07:09,212 --> 00:07:11,192 How do we address that? 127 00:07:12,158 --> 00:07:13,477 DS: Yeah. 128 00:07:13,501 --> 00:07:20,380 I do think that a mobile is really a key to unlocking this. 129 00:07:20,796 --> 00:07:23,731 I've often said that, really, 130 00:07:23,755 --> 00:07:28,570 one of the big moon shots for the financial services industry 131 00:07:28,594 --> 00:07:31,716 is this idea of not just financial inclusion. 132 00:07:31,740 --> 00:07:34,285 Most people define financial inclusion 133 00:07:34,309 --> 00:07:37,777 by somebody having access to a bank account, 134 00:07:37,801 --> 00:07:41,166 but just having access to a bank account is not nearly enough. 135 00:07:41,190 --> 00:07:43,810 I think what we need to aim for 136 00:07:43,834 --> 00:07:46,405 is how do we think about financial health? 137 00:07:46,429 --> 00:07:49,585 How do we make sure that people have the ability 138 00:07:49,609 --> 00:07:52,832 to have some wherewithal 139 00:07:52,856 --> 00:07:59,615 to create savings to withstand some kind of financial shock to the system? 140 00:07:59,639 --> 00:08:03,138 I do think that mobile phones 141 00:08:03,162 --> 00:08:06,186 will be the way that this occurs 142 00:08:06,210 --> 00:08:09,163 and will be very inclusive going forward. 143 00:08:09,187 --> 00:08:14,752 There are going to be something like six billion smartphones in the world 144 00:08:14,776 --> 00:08:16,772 over the next several years. 145 00:08:16,796 --> 00:08:19,956 The cost of a smartphone is plummeting. 146 00:08:19,980 --> 00:08:24,682 I think in India now you can buy a smartphone for under 25 dollars. 147 00:08:24,706 --> 00:08:29,529 So you're going to have ubiquity of smartphones across the world, 148 00:08:29,553 --> 00:08:34,469 and, in fact, what's very interesting is, in lower-income populations, 149 00:08:34,493 --> 00:08:39,975 there is a greater penetration of smartphones than in higher income 150 00:08:39,999 --> 00:08:44,739 because the smartphone is the only device that somebody has. 151 00:08:44,763 --> 00:08:50,266 Higher-income individuals may have desktops or iPads, 152 00:08:50,290 --> 00:08:51,467 that kind of thing, 153 00:08:51,491 --> 00:08:53,778 but lower income can afford one device, 154 00:08:53,802 --> 00:08:55,658 and they choose it to be a smartphone 155 00:08:55,682 --> 00:08:59,923 because they can get and live their life through that one device. 156 00:08:59,947 --> 00:09:02,085 And think about that one device. 157 00:09:02,109 --> 00:09:06,408 Really, you have all the power of a bank branch 158 00:09:06,432 --> 00:09:08,318 in the palm of your hands. 159 00:09:08,342 --> 00:09:14,492 And when you can start to create distribution of services, 160 00:09:14,516 --> 00:09:15,993 financial services, 161 00:09:16,017 --> 00:09:18,043 through a smartphone, 162 00:09:18,067 --> 00:09:21,866 you then are able to manage and move money 163 00:09:21,890 --> 00:09:25,260 in ways that we couldn't do traditionally. 164 00:09:26,122 --> 00:09:28,034 In the physical world, 165 00:09:28,058 --> 00:09:29,261 if you get a check, 166 00:09:29,285 --> 00:09:33,147 you need to then go to a cash checking place to cash it. 167 00:09:33,171 --> 00:09:36,019 You stand in line for 30 minutes. 168 00:09:36,043 --> 00:09:39,556 They then charge you anywhere between two and five percent 169 00:09:39,580 --> 00:09:43,742 to just change the format of currency 170 00:09:43,766 --> 00:09:45,562 from a check to cash. 171 00:09:45,586 --> 00:09:47,929 And then you have cash and you want to pay a bill. 172 00:09:47,953 --> 00:09:49,890 You need to stand in line again 173 00:09:49,914 --> 00:09:51,174 at a bill pay, 174 00:09:51,198 --> 00:09:54,078 and then you have to pay maybe 10 dollars 175 00:09:54,102 --> 00:09:57,445 for an individual bill as a fee. 176 00:09:57,469 --> 00:10:00,338 If you do that via a smartphone, 177 00:10:00,362 --> 00:10:04,074 I believe that not only do you save a tremendous amount of time, 178 00:10:04,098 --> 00:10:06,342 because if you're outside the financial system, 179 00:10:06,366 --> 00:10:10,340 managing and moving money is practically a part-time job 180 00:10:10,364 --> 00:10:11,590 to go and do that, 181 00:10:11,614 --> 00:10:15,258 so not only do you save time and return time to individuals, 182 00:10:15,282 --> 00:10:18,828 but you can cut the cost of transactions 183 00:10:18,852 --> 00:10:22,664 by anywhere between 50 and 75 percent. 184 00:10:22,688 --> 00:10:26,626 And remember that $140 billion number that I gave you? 185 00:10:26,650 --> 00:10:29,214 And that's just in the US. 186 00:10:29,238 --> 00:10:32,061 Imagine if you could cut that in half 187 00:10:32,085 --> 00:10:36,493 and return that to the most vulnerable populations 188 00:10:36,517 --> 00:10:38,226 that need it most. 189 00:10:38,250 --> 00:10:41,402 So I think there's tremendous promise 190 00:10:41,426 --> 00:10:43,497 in the use of technology 191 00:10:43,521 --> 00:10:45,808 to help provide both inclusion 192 00:10:45,832 --> 00:10:49,344 and make sure there aren't digital haves and have-nots, 193 00:10:49,368 --> 00:10:52,607 but also to start on this journey towards financial health. 194 00:10:54,203 --> 00:10:56,430 CH: Yeah, I think a lot of people don't realize 195 00:10:56,454 --> 00:10:59,322 that you don't need a bank account or even a credit card 196 00:10:59,346 --> 00:11:02,878 to open a PayPal account, 197 00:11:02,902 --> 00:11:05,475 which is super-interesting. 198 00:11:05,499 --> 00:11:08,836 I mean, do you see a time where traditional banks don't exist 199 00:11:08,860 --> 00:11:13,848 or at least play a much smaller role in the financial services industry? 200 00:11:14,392 --> 00:11:17,401 DS: Well, I think the entire financial services industry 201 00:11:17,425 --> 00:11:20,306 is evolving right now, 202 00:11:20,330 --> 00:11:24,850 and so I think banks will always play a role, 203 00:11:24,874 --> 00:11:29,293 or as far into the future as I can see, 204 00:11:29,317 --> 00:11:30,602 but it will evolve. 205 00:11:30,626 --> 00:11:35,172 I mean, think about basic credit cards. 206 00:11:35,196 --> 00:11:37,209 Today, you think about a credit card, 207 00:11:37,233 --> 00:11:40,515 and you think about it predominantly as a form factor, 208 00:11:40,539 --> 00:11:42,553 something that you pull out of your pocket. 209 00:11:42,577 --> 00:11:47,420 Sometimes there's status associated with what you're pulling out of your pocket, 210 00:11:47,444 --> 00:11:51,628 depending on the color of that credit card. 211 00:11:51,652 --> 00:11:55,596 But really I think those form factors start to go away 212 00:11:55,620 --> 00:11:58,791 and become embedded in digital wallets. 213 00:11:58,815 --> 00:12:02,553 So credit will always be an important element. 214 00:12:02,577 --> 00:12:04,639 You know, most people in the world, 215 00:12:04,663 --> 00:12:11,387 it isn't that their cash outlays exceed their cash intake. 216 00:12:11,411 --> 00:12:14,802 It's just that they're not evenly distributed. 217 00:12:14,826 --> 00:12:19,057 So there are times where your cash outflows exceed your cash intake, 218 00:12:19,081 --> 00:12:24,210 and there, you need some form of credit to make up that difference. 219 00:12:24,234 --> 00:12:30,402 And so I think forms of credit will always be an important element. 220 00:12:30,426 --> 00:12:35,509 But the way that you extend credit will change going forward, 221 00:12:35,533 --> 00:12:38,580 the way that you think about scoring people 222 00:12:38,604 --> 00:12:41,682 in terms of can they handle credit. 223 00:12:41,706 --> 00:12:45,531 You know, traditionally, in more developed countries, 224 00:12:45,555 --> 00:12:49,927 you use what's called FICO scores or bureau scores, 225 00:12:49,951 --> 00:12:54,348 but those ignore so many of the financial transactions 226 00:12:54,372 --> 00:12:57,185 that people who are outside the financial system do, 227 00:12:57,209 --> 00:13:00,633 like paying rent or paying their bills on time. 228 00:13:00,657 --> 00:13:06,841 And with the data and information and machine learning around that -- 229 00:13:06,865 --> 00:13:09,251 and we need to be careful that there aren't biases 230 00:13:09,275 --> 00:13:12,017 built into those algorithms -- 231 00:13:12,041 --> 00:13:15,538 we can start to do things that could never be done before. 232 00:13:15,562 --> 00:13:18,118 I'll just give you one quick example. 233 00:13:18,142 --> 00:13:23,091 We're one of the largest providers of working capital to small businesses 234 00:13:23,115 --> 00:13:24,658 in the world. 235 00:13:24,682 --> 00:13:28,307 We're probably one of the top five in the United States. 236 00:13:28,331 --> 00:13:32,166 So we've done over 14, 15 billion dollars 237 00:13:32,190 --> 00:13:35,165 of lending of working capital to small businesses. 238 00:13:35,551 --> 00:13:40,483 Seventy percent of that goes to the 30 percent of counties 239 00:13:40,507 --> 00:13:44,630 where 10 or more banks have closed branches. 240 00:13:44,654 --> 00:13:46,513 And where do banks close branches? 241 00:13:46,537 --> 00:13:49,384 Banks close branches in neighborhoods 242 00:13:49,408 --> 00:13:52,873 where the median income is below the national average, 243 00:13:52,897 --> 00:13:56,458 which makes sense because for a branch to be profitable, 244 00:13:56,482 --> 00:13:59,153 they need a certain amount of deposits 245 00:13:59,177 --> 00:14:01,230 for that branch to actually be profitable. 246 00:14:01,254 --> 00:14:03,900 And so, in lower income neighborhoods, 247 00:14:03,924 --> 00:14:06,063 branches are starting to close. 248 00:14:06,632 --> 00:14:10,469 So why are 70 percent of our loans in those lower income neighborhoods? 249 00:14:10,493 --> 00:14:12,280 It's because we do machine learning. 250 00:14:12,304 --> 00:14:15,988 We don't even look at FICO scores or bureau scores. 251 00:14:16,012 --> 00:14:19,268 We look at a number of different data elements. 252 00:14:19,292 --> 00:14:23,226 And so we can lend into those lower income neighborhoods 253 00:14:23,250 --> 00:14:25,140 where nobody else can, 254 00:14:25,164 --> 00:14:27,121 and when we do that, 255 00:14:27,145 --> 00:14:32,958 the average sale of a small business goes up by 22 percent. 256 00:14:32,982 --> 00:14:37,051 And imagine the impact that has on communities and neighborhoods 257 00:14:37,075 --> 00:14:39,726 where they can finally get the working capital 258 00:14:39,750 --> 00:14:41,731 to expand those small businesses. 259 00:14:41,755 --> 00:14:43,856 And I think that's a perfect example 260 00:14:43,880 --> 00:14:47,765 of the promise of what technology and financial services 261 00:14:47,789 --> 00:14:49,498 married together can do. 262 00:14:51,396 --> 00:14:53,626 CH: I think it's so interesting. 263 00:14:53,650 --> 00:14:55,113 I'm curious. 264 00:14:55,137 --> 00:15:01,411 The tech industry has been criticized for amassing power over society, 265 00:15:01,435 --> 00:15:04,678 not that the banking industry isn't criticized. 266 00:15:04,702 --> 00:15:09,148 But what do you say about people who might be worried about 267 00:15:09,172 --> 00:15:12,775 tech companies taking on even more influence and control 268 00:15:12,799 --> 00:15:14,771 over what's happening in their lives? 269 00:15:15,365 --> 00:15:16,944 DS: Yeah. 270 00:15:16,968 --> 00:15:23,918 Well, I think what's so important for any company and tech companies 271 00:15:23,942 --> 00:15:29,698 is to respect the boundaries 272 00:15:29,722 --> 00:15:33,682 in terms of what consumers expect from a company that serves them. 273 00:15:34,505 --> 00:15:41,369 I think the most important brand attribute that a company can have is trust, 274 00:15:41,393 --> 00:15:45,261 and trust comes from the understanding 275 00:15:45,285 --> 00:15:49,217 that a company respects your privacy 276 00:15:49,241 --> 00:15:53,922 and will not sell your data or information, 277 00:15:53,946 --> 00:15:59,865 that it can perform transactions in a secure manner 278 00:15:59,889 --> 00:16:03,881 so that your transactions are protected. 279 00:16:03,905 --> 00:16:07,652 And I think those are kind of foundational, 280 00:16:07,676 --> 00:16:11,914 and I think any company needs to respect that. 281 00:16:11,938 --> 00:16:16,399 They need to assure that consumers 282 00:16:16,423 --> 00:16:20,137 have the privacy that they desire 283 00:16:20,161 --> 00:16:23,572 and the safety and security that is required 284 00:16:23,596 --> 00:16:25,260 to serve them the right way. 285 00:16:26,813 --> 00:16:31,951 CH: And obviously, you've gained a lot of trust with the US government. 286 00:16:31,975 --> 00:16:36,022 Maybe we could talk a little bit about how you've been working with them 287 00:16:36,046 --> 00:16:40,649 to distribute some money through the Paycheck Protection Program. 288 00:16:40,673 --> 00:16:41,850 And I was curious, 289 00:16:41,874 --> 00:16:45,185 I've been reading about it, and it sounds like 290 00:16:45,209 --> 00:16:48,182 30 million-ish small businesses in the United States 291 00:16:48,206 --> 00:16:51,241 are able to get those funds, 292 00:16:51,265 --> 00:16:54,023 but only six million have received the loans. 293 00:16:54,047 --> 00:16:55,511 What do you think's happened? 294 00:16:56,515 --> 00:16:57,709 DS: Yep. 295 00:16:57,733 --> 00:17:03,298 Well, I think initially, the government -- and I give them a lot of credit -- 296 00:17:03,322 --> 00:17:06,001 they responded quite quickly 297 00:17:06,025 --> 00:17:10,139 with a 3 trillion dollar stimulus package. 298 00:17:10,163 --> 00:17:13,042 These are massive numbers that were happening 299 00:17:13,066 --> 00:17:16,189 in very condensed time frames. 300 00:17:16,213 --> 00:17:19,649 We were working with various agencies, 301 00:17:19,673 --> 00:17:23,572 very closely with the Treasury Department, 302 00:17:23,596 --> 00:17:28,325 in terms of distribution of the stimulus. 303 00:17:28,349 --> 00:17:33,767 And they were working literally night and day on this. 304 00:17:33,791 --> 00:17:37,337 The Small Business Administration was working night and day. 305 00:17:37,361 --> 00:17:39,857 But these are volumes 306 00:17:39,881 --> 00:17:44,117 that have never been seen before running through these systems, 307 00:17:44,141 --> 00:17:48,689 and the first tranche of those loans 308 00:17:48,713 --> 00:17:49,913 was very difficult. 309 00:17:49,937 --> 00:17:56,824 There were a lot of technical difficulties in getting those out to small businesses. 310 00:17:56,848 --> 00:17:59,921 And that first tranche was not enough, 311 00:17:59,945 --> 00:18:04,238 and it was quickly used, 312 00:18:04,262 --> 00:18:08,091 and there are still a host of small businesses 313 00:18:08,115 --> 00:18:09,910 that needed money. 314 00:18:09,934 --> 00:18:12,214 The second tranche that came out 315 00:18:12,238 --> 00:18:13,775 is still actually in effect. 316 00:18:13,799 --> 00:18:15,712 It has not been used up, 317 00:18:15,736 --> 00:18:18,749 and we are continuing to lend on that. 318 00:18:18,773 --> 00:18:24,634 We've been able to lend to some 50,000 small businesses. 319 00:18:24,658 --> 00:18:27,804 We've lent out about 1.7 billion dollars, 320 00:18:27,828 --> 00:18:30,824 and our loan size, 321 00:18:30,848 --> 00:18:32,402 which really I'm proud of, 322 00:18:32,426 --> 00:18:35,338 is about 31,000 dollars. 323 00:18:35,362 --> 00:18:39,518 The average that a bank does is between 100 and 125,000 dollars. 324 00:18:39,542 --> 00:18:44,558 So we are lending to these true small businesses 325 00:18:44,582 --> 00:18:46,725 on Main Street, 326 00:18:46,749 --> 00:18:52,188 and I'm proud that we've been able to go do that, 327 00:18:52,212 --> 00:18:56,288 and I think we should give credit to the US government 328 00:18:56,312 --> 00:18:58,512 and governments around the world 329 00:18:58,536 --> 00:19:01,362 that are taking this quite seriously 330 00:19:01,386 --> 00:19:05,901 and putting a tremendous amount, a percentage of their GDP, 331 00:19:05,925 --> 00:19:09,356 towards the rescue of small businesses 332 00:19:09,380 --> 00:19:11,998 and towards trying to take care of consumers 333 00:19:12,022 --> 00:19:16,801 that find themselves in really difficult straits right now. 334 00:19:16,825 --> 00:19:18,237 And we've been trying to, 335 00:19:18,261 --> 00:19:23,738 instead of people mailing out checks, which is ridiculous in today's world -- 336 00:19:23,762 --> 00:19:26,853 people aren't living where they think they're going to be living, 337 00:19:26,877 --> 00:19:30,478 they're with their parents or with friends or in a different location, 338 00:19:30,502 --> 00:19:31,710 and mailing a check 339 00:19:31,734 --> 00:19:34,678 and then having to take a check and go somewhere, 340 00:19:34,702 --> 00:19:37,201 which you can't even go if you're sheltered in place, 341 00:19:37,225 --> 00:19:38,389 to cash it, 342 00:19:38,413 --> 00:19:41,135 doing that electronically just makes a ton more sense -- 343 00:19:41,159 --> 00:19:43,921 and we've been working with the IRS and Treasury 344 00:19:43,945 --> 00:19:47,669 and other government agencies to distribute that electronically. 345 00:19:49,429 --> 00:19:51,236 CH: Yeah, that makes a lot of sense. 346 00:19:51,260 --> 00:19:54,312 It's a massive, massive project 347 00:19:54,336 --> 00:19:56,129 for all of us. 348 00:19:56,153 --> 00:19:59,454 Whitney is here with some questions from our community. 349 00:20:00,052 --> 00:20:01,527 DS: Hello, Whitney. 350 00:20:01,551 --> 00:20:04,021 Whitney Pennington Rodgers: Hello Dan. How are you? 351 00:20:04,045 --> 00:20:06,258 So the community has some interesting questions 352 00:20:06,282 --> 00:20:09,481 following up on what you were talking about earlier about security. 353 00:20:09,505 --> 00:20:11,183 We have a question from Marc -- 354 00:20:11,207 --> 00:20:14,183 and I apologize in advance if I mispronounce your name, Marc -- 355 00:20:14,207 --> 00:20:15,385 Marc Vanlerberghe: 356 00:20:15,409 --> 00:20:17,731 "The move to digital cash could be one more step 357 00:20:17,755 --> 00:20:20,032 towards creating the perfect surveillance state. 358 00:20:20,056 --> 00:20:21,871 How do we avoid this from happening?" 359 00:20:23,080 --> 00:20:26,073 DS: Yeah, well, this is what I was talking about, Marc, before. 360 00:20:26,097 --> 00:20:31,517 I mean, I think this idea of trust 361 00:20:31,541 --> 00:20:34,302 is incredibly important. 362 00:20:34,326 --> 00:20:39,106 I think the only companies that will be successful -- 363 00:20:39,130 --> 00:20:43,591 and I think we hold a lot of this in our own hands as consumers, by the way; 364 00:20:43,615 --> 00:20:47,190 we need to be aware of data and information that we're giving 365 00:20:47,214 --> 00:20:50,159 and to what companies we're doing that with -- 366 00:20:50,183 --> 00:20:53,676 but I think the companies that will be successful 367 00:20:53,700 --> 00:20:56,422 are those that have a high degree of trust, 368 00:20:56,446 --> 00:21:00,917 and trust happens by protecting your privacy 369 00:21:00,941 --> 00:21:05,915 but also very much assuring that your transactions in a digital world 370 00:21:05,939 --> 00:21:07,643 are safe and secure. 371 00:21:07,667 --> 00:21:11,848 I mean, the idea of cybersecurity 372 00:21:11,872 --> 00:21:13,551 has always been important, 373 00:21:13,575 --> 00:21:18,707 but is ever more important as we move from physical to digital, 374 00:21:18,731 --> 00:21:22,370 and that's where large data sets are important, 375 00:21:22,394 --> 00:21:27,818 because a consumer's identity is stolen every two seconds. 376 00:21:27,842 --> 00:21:30,931 Every two seconds, some consumer has their identity stolen. 377 00:21:30,955 --> 00:21:33,453 And so we have to be, for instance, 378 00:21:33,477 --> 00:21:37,666 we have to be sure that even when you sign in 379 00:21:37,690 --> 00:21:39,885 with your credentials, 380 00:21:39,909 --> 00:21:42,266 they're actually real credentials. 381 00:21:42,290 --> 00:21:47,827 We have to look at 30 to 100 different elements of that transaction 382 00:21:47,851 --> 00:21:49,993 to make sure it's really you 383 00:21:50,017 --> 00:21:52,699 before we let that money out of your account. 384 00:21:52,723 --> 00:21:57,755 And so there is a combination of making sure you have enough data 385 00:21:57,779 --> 00:21:59,898 to protect somebody 386 00:21:59,922 --> 00:22:04,780 but also assure that your privacy is held sacrosanct, 387 00:22:04,804 --> 00:22:09,939 and I think that is a balancing act and one that needs to happen 388 00:22:09,963 --> 00:22:13,039 in order for us to do this successfully. 389 00:22:14,711 --> 00:22:18,607 WPR: Great, and actually sort of going from digital cash to digital currency, 390 00:22:18,631 --> 00:22:22,738 we have another question from Simone Ross in our community 391 00:22:22,762 --> 00:22:26,393 about the opportunity that exists for digital currency. 392 00:22:26,417 --> 00:22:29,196 She mentioned that PayPal pulled out of Libra. 393 00:22:29,220 --> 00:22:34,574 What would it take for a truly inclusive digital currency to take hold here? 394 00:22:35,398 --> 00:22:36,686 DS: Yeah. 395 00:22:36,710 --> 00:22:41,576 I think there is a tremendous amount of promise 396 00:22:41,600 --> 00:22:45,562 as we think about digital currencies. 397 00:22:45,586 --> 00:22:47,925 Our pulling out of Libra 398 00:22:47,949 --> 00:22:53,724 had nothing to do with our firm conviction 399 00:22:53,748 --> 00:23:00,747 that blockchain and other forms of maybe stable coin currencies 400 00:23:01,918 --> 00:23:03,647 are extremely important 401 00:23:03,671 --> 00:23:06,188 and can be very, very helpful, 402 00:23:06,212 --> 00:23:08,258 especially in different parts of the world. 403 00:23:08,282 --> 00:23:12,880 As we think about stability in different parts of the world 404 00:23:12,904 --> 00:23:16,135 where currencies can fluctuate up and down, 405 00:23:16,159 --> 00:23:21,237 to have a more stable currency where somebody can know, 406 00:23:21,261 --> 00:23:22,856 if they have that, 407 00:23:22,880 --> 00:23:24,656 that it's going to be worth x amount, 408 00:23:24,680 --> 00:23:26,517 and that they can transact, 409 00:23:26,541 --> 00:23:29,283 either with other individuals around the world 410 00:23:29,307 --> 00:23:33,332 or, importantly, at merchants around the world. 411 00:23:33,912 --> 00:23:40,846 And we are looking at all forms of digital currencies right now, 412 00:23:41,393 --> 00:23:44,327 working hand in hand with a number of different governments, 413 00:23:44,351 --> 00:23:50,156 and I think we should all think about how technology is going to evolve 414 00:23:50,180 --> 00:23:53,475 and how currencies will evolve as a result of that. 415 00:23:53,499 --> 00:24:00,491 And I think this crisis has really opened the eyes 416 00:24:00,515 --> 00:24:02,990 of many governments around the world 417 00:24:03,014 --> 00:24:08,212 as to the need for different tool sets 418 00:24:08,236 --> 00:24:09,749 to create stimulus 419 00:24:09,773 --> 00:24:15,864 and to efficiently and quickly and effectively distribute funds 420 00:24:15,888 --> 00:24:17,682 to their citizens. 421 00:24:19,466 --> 00:24:22,245 WPR: Great. Well, I'll be back shortly with more questions, 422 00:24:22,269 --> 00:24:25,477 and I'd just love to remind the community that you can ask questions 423 00:24:25,501 --> 00:24:26,952 on the "Ask question" feature. 424 00:24:26,976 --> 00:24:29,556 Be sure to use the pull-down tab to select Episode 2, 425 00:24:29,580 --> 00:24:30,731 so those questions come. 426 00:24:30,755 --> 00:24:31,906 Thank you. 427 00:24:31,930 --> 00:24:33,303 DS: Thanks, Whitney. 428 00:24:33,327 --> 00:24:35,422 CH: Thanks, Whitney. 429 00:24:35,446 --> 00:24:38,889 Dan, I want to go back to something we touched on in the beginning 430 00:24:38,913 --> 00:24:41,498 about financial wellness. 431 00:24:41,994 --> 00:24:44,070 PayPal has done something unique 432 00:24:44,094 --> 00:24:49,632 in terms of calculating how much to pay people 433 00:24:49,656 --> 00:24:52,430 and how much you should spend on benefits. 434 00:24:52,454 --> 00:24:54,666 Traditionally, wages are set by the market, 435 00:24:54,690 --> 00:24:58,572 but you've found that paying as much or even more than other companies 436 00:24:58,596 --> 00:24:59,785 wasn't always enough. 437 00:24:59,809 --> 00:25:01,742 Can you tell us about that moment? 438 00:25:03,221 --> 00:25:04,625 DS: Yeah. 439 00:25:05,420 --> 00:25:11,088 So I said, kind of, in our opening, in one of my opening statements, 440 00:25:11,112 --> 00:25:16,567 that two-thirds of Americans struggle to make ends meet 441 00:25:16,591 --> 00:25:18,853 at the end of the month. 442 00:25:19,546 --> 00:25:24,350 They are financially stressed, 443 00:25:24,374 --> 00:25:27,552 and it kind of wreaks havoc in their life. 444 00:25:28,146 --> 00:25:34,082 I did a study to look at PayPal employees. 445 00:25:34,106 --> 00:25:36,680 We did a research study, 446 00:25:36,704 --> 00:25:40,404 and I did it because I thought I was going to get back this great information 447 00:25:40,428 --> 00:25:43,943 that I was going to talk about at an employee meeting 448 00:25:43,967 --> 00:25:45,242 about how well we pay, 449 00:25:45,266 --> 00:25:47,691 because we pay, to your point, 450 00:25:47,715 --> 00:25:49,637 at or above market 451 00:25:49,661 --> 00:25:52,423 in every single location around the world. 452 00:25:53,228 --> 00:25:58,039 And what I found is, unfortunately, like the rest of the world, 453 00:25:58,063 --> 00:26:01,268 even though we paid at market or above market, 454 00:26:01,292 --> 00:26:06,221 60 percent of our operations personnel, 455 00:26:06,245 --> 00:26:09,656 our entry-level employees, our hourly workers, 456 00:26:09,680 --> 00:26:10,853 face the same thing. 457 00:26:10,877 --> 00:26:12,793 They struggle to make ends meet. 458 00:26:12,817 --> 00:26:16,007 And that was simply unacceptable for me. 459 00:26:16,031 --> 00:26:20,458 I think the world is changing 460 00:26:20,482 --> 00:26:23,836 in terms of the responsibility of corporations, 461 00:26:23,860 --> 00:26:26,858 the responsibility of CEOs. 462 00:26:26,882 --> 00:26:31,317 We have a lot of different stakeholders that we try to satisfy, 463 00:26:31,341 --> 00:26:36,223 from regulators to shareholders to customers to employees. 464 00:26:36,247 --> 00:26:40,401 But I think the number one responsibility that we have 465 00:26:40,425 --> 00:26:44,147 is the health -- financial health -- of our employees, 466 00:26:44,171 --> 00:26:47,833 because nothing could be more important to a company 467 00:26:47,857 --> 00:26:53,077 than to have financially secure, passionate employees working for you, 468 00:26:53,101 --> 00:26:56,291 because nobody is going to serve customers 469 00:26:56,315 --> 00:27:00,385 better than employees who feel a part of something 470 00:27:00,409 --> 00:27:04,855 and feel financially secure and glad to be a part of that company. 471 00:27:04,879 --> 00:27:09,331 And so then the real question becomes: How do you measure that? 472 00:27:09,355 --> 00:27:13,260 Because a lot of people think about living wages or a minimum wage. 473 00:27:13,284 --> 00:27:16,444 And we thought that was insufficient, 474 00:27:16,468 --> 00:27:21,967 and we came up with a measurement we called "net disposable income," 475 00:27:21,991 --> 00:27:23,158 which is, basically: 476 00:27:23,182 --> 00:27:29,190 After you pay taxes and your basically essential living expenses, 477 00:27:29,214 --> 00:27:35,088 how much money do you have left over for discretionary things 478 00:27:35,112 --> 00:27:36,899 or to save? 479 00:27:36,923 --> 00:27:40,197 And here's the really unfortunate thing -- and I'm not proud of this, 480 00:27:40,221 --> 00:27:42,866 but remember, we were paying at market or above, 481 00:27:42,890 --> 00:27:47,237 so I thought the market would take care of this, right, by doing that -- 482 00:27:47,261 --> 00:27:50,734 we found that for that population, 483 00:27:50,758 --> 00:27:55,658 they had four to six percent NDI, net disposable income, 484 00:27:55,682 --> 00:27:59,343 after paying taxes and essential living expenses. 485 00:27:59,367 --> 00:28:00,531 That is not enough. 486 00:28:00,555 --> 00:28:03,234 You are going to struggle to make ends meet. 487 00:28:03,258 --> 00:28:07,423 And by the way, NDI changes location to location to location 488 00:28:07,447 --> 00:28:08,949 around the globe, right? 489 00:28:08,973 --> 00:28:14,377 There's a different NDI in Manila, a different NDI in Omaha, Nebraska, 490 00:28:14,401 --> 00:28:17,307 than there is in New York City, etc. 491 00:28:17,331 --> 00:28:20,855 And so we basically said to ourselves, 492 00:28:20,879 --> 00:28:25,207 we need to take NDI to 20 percent. 493 00:28:25,231 --> 00:28:27,104 Because at 20 percent -- 494 00:28:27,128 --> 00:28:30,642 and that's a huge shift, from four to six to 20 percent -- 495 00:28:30,666 --> 00:28:36,859 but at 20 percent, you actually have the ability to save 496 00:28:36,883 --> 00:28:41,715 and to put money away and to take care of discretionary expenses. 497 00:28:41,739 --> 00:28:47,355 And so we did a pretty massive reorientation 498 00:28:47,379 --> 00:28:49,580 of our compensation systems. 499 00:28:50,268 --> 00:28:56,296 We lowered the cost of benefits by 58 percent, 500 00:28:56,320 --> 00:28:59,605 because benefits are like a regressive tax, 501 00:28:59,629 --> 00:29:02,683 you pay the same amount no matter what your salary is. 502 00:29:02,707 --> 00:29:07,382 And so we had a lot of employees who weren't taking health care benefits, 503 00:29:07,406 --> 00:29:09,768 because it cost too much to be able to do that. 504 00:29:09,792 --> 00:29:12,366 So we lowered it by 58 percent. 505 00:29:12,390 --> 00:29:16,476 We made every single employee of PayPal a shareholder 506 00:29:16,500 --> 00:29:18,512 and an owner of the business, 507 00:29:18,536 --> 00:29:20,842 and we gave them pretty big grants 508 00:29:20,866 --> 00:29:26,123 so that they could be a part of the success of PayPal going forward. 509 00:29:26,147 --> 00:29:29,520 We raised salaries where we needed to go and do that. 510 00:29:29,544 --> 00:29:33,177 And then we wrapped all of that into a financial education program, 511 00:29:33,201 --> 00:29:36,383 because people had never gotten equity before, 512 00:29:36,407 --> 00:29:38,056 they were trying to think through, 513 00:29:38,080 --> 00:29:42,404 "How do I save now that I've got incremental dollars to go and do that?" 514 00:29:42,428 --> 00:29:49,055 And that cost us quite a bit of money to go and do that, 515 00:29:49,079 --> 00:29:50,604 but I really feel, 516 00:29:50,628 --> 00:29:53,958 just like how we spend a lot of money to take care of customers, 517 00:29:53,982 --> 00:29:57,598 as you mentioned up front, in COVID-19, 518 00:29:57,622 --> 00:30:03,942 that companies need to stand for more than just making money, 519 00:30:03,966 --> 00:30:08,301 for more than just maximizing our profits next quarter. 520 00:30:08,325 --> 00:30:12,027 I firmly, firmly believe 521 00:30:12,051 --> 00:30:16,013 that the costs associated with taking care of our employees, 522 00:30:16,037 --> 00:30:18,216 taking care of our customers, 523 00:30:18,240 --> 00:30:20,953 will benefit us in the long run 524 00:30:20,977 --> 00:30:24,113 multiplefold over the costs associated with doing that. 525 00:30:24,137 --> 00:30:29,347 And we're already beginning to see some of the impact of that. 526 00:30:29,371 --> 00:30:36,354 And so, I think every CEO, every company, 527 00:30:36,378 --> 00:30:39,371 needs to really now start to think about, 528 00:30:39,395 --> 00:30:42,436 especially maybe as a result of this crisis, 529 00:30:42,460 --> 00:30:45,378 but as I mentioned, we had a crisis before this, 530 00:30:45,402 --> 00:30:49,632 how do we put our employees first, take care of them? 531 00:30:49,656 --> 00:30:52,641 Because if you do that, you'll take care of customers, 532 00:30:52,665 --> 00:30:54,293 and if you take care of customers, 533 00:30:54,317 --> 00:30:56,495 you'll take care of shareholders, inevitably. 534 00:30:56,495 --> 00:31:02,288 And so this has been a huge part of it 535 00:31:02,312 --> 00:31:04,385 about for the last year or so. 536 00:31:06,457 --> 00:31:07,747 CH: It's so interesting, 537 00:31:07,771 --> 00:31:10,759 and it brings up so many questions, I think, 538 00:31:10,783 --> 00:31:13,468 for me and probably our community as well. 539 00:31:13,492 --> 00:31:19,350 I mean, PayPal is a hugely profitable tech business, 540 00:31:19,374 --> 00:31:23,074 huge free cash flow and big margins. 541 00:31:23,098 --> 00:31:26,374 Do you think this model is something that every company can do, 542 00:31:26,398 --> 00:31:33,379 whether it's a tech company, a manufacture, a meatpacking business? 543 00:31:33,403 --> 00:31:36,798 I mean, is this what everyone should be focused on? 544 00:31:37,861 --> 00:31:42,582 DS: Well, I think that -- and I don't want to moralize 545 00:31:42,606 --> 00:31:46,526 or tell other companies what they should do -- 546 00:31:46,550 --> 00:31:50,831 but to me, I think everyone should understand 547 00:31:50,855 --> 00:31:53,167 the financial health of their employees. 548 00:31:53,191 --> 00:31:56,237 That's a baseline thing to go do. 549 00:31:56,261 --> 00:31:58,691 What you do post-that 550 00:31:58,715 --> 00:32:04,563 is up to maybe your financial strength as a company 551 00:32:04,587 --> 00:32:09,071 or where you put your order of priorities. 552 00:32:09,095 --> 00:32:11,087 But what I've found is, 553 00:32:12,093 --> 00:32:15,722 I thought the market could tell you that, 554 00:32:15,746 --> 00:32:19,641 and this is why I say, in many ways -- 555 00:32:19,665 --> 00:32:21,845 you know, I'm a big believer in capitalism. 556 00:32:21,869 --> 00:32:25,747 I think it's, in many ways, 557 00:32:25,771 --> 00:32:29,776 the best economic system that I know of. 558 00:32:29,800 --> 00:32:31,989 But, like everything, it needs an upgrade. 559 00:32:32,013 --> 00:32:34,571 It needs tuning, 560 00:32:34,595 --> 00:32:39,249 and at least for these vulnerable populations, 561 00:32:39,273 --> 00:32:42,018 just because you pay at market 562 00:32:42,042 --> 00:32:46,455 doesn't mean that they have financial health or financial wellness. 563 00:32:46,479 --> 00:32:50,975 And I think everyone should know 564 00:32:50,999 --> 00:32:55,275 whether or not their employees have the wherewithal to be able to save 565 00:32:55,299 --> 00:32:57,947 to withstand financial shocks, 566 00:32:57,971 --> 00:33:02,417 and then really understand, like, what can you do about it? 567 00:33:02,441 --> 00:33:05,249 I think this NDI measure 568 00:33:05,273 --> 00:33:07,125 is a really interesting one. 569 00:33:07,149 --> 00:33:08,971 It takes some time to go do it, 570 00:33:08,995 --> 00:33:11,700 because you have to be quite thorough 571 00:33:11,724 --> 00:33:17,206 and you have to really understand living expenses by location 572 00:33:17,230 --> 00:33:20,445 and what tax jurisdictions there are. 573 00:33:20,469 --> 00:33:24,652 But you need to create an NDI 574 00:33:24,676 --> 00:33:26,826 that's to a certain level 575 00:33:26,850 --> 00:33:29,210 where people aren't struggling to make ends meet. 576 00:33:29,234 --> 00:33:31,639 Because if people are struggling to make ends meet, 577 00:33:31,663 --> 00:33:33,448 they are not as productive at work. 578 00:33:33,472 --> 00:33:36,521 They're worried about, like, what am I going to do with my kids? 579 00:33:36,545 --> 00:33:39,104 My kid just got sick. I don't have health insurance. 580 00:33:39,128 --> 00:33:42,362 I think there's a spiral that occurs. 581 00:33:42,386 --> 00:33:44,953 You think you're actually saving money 582 00:33:44,977 --> 00:33:46,502 by paying less, 583 00:33:46,526 --> 00:33:48,574 but the reality is, 584 00:33:48,598 --> 00:33:51,020 at least in my belief system, 585 00:33:51,044 --> 00:33:53,489 you take care of your employees, 586 00:33:53,513 --> 00:33:56,712 and other things naturally flow from that. 587 00:33:56,736 --> 00:33:59,123 They are more productive. 588 00:33:59,147 --> 00:34:03,115 They love being a part of that company. 589 00:34:03,139 --> 00:34:05,301 They take care of customers better. 590 00:34:05,325 --> 00:34:07,355 And all of those things 591 00:34:07,379 --> 00:34:12,593 inevitably accrue to the benefit of a company 592 00:34:12,617 --> 00:34:16,070 in terms of how it's trying to serve its ultimate end market. 593 00:34:16,094 --> 00:34:18,465 But it starts with your employees. 594 00:34:19,896 --> 00:34:25,114 CH: So obviously you believe in this "capitalism needs an upgrade," 595 00:34:25,138 --> 00:34:29,108 and I think NDI is something so many companies should adopt. 596 00:34:29,132 --> 00:34:34,482 But do you think this happens through benevolent corporate activity? 597 00:34:34,506 --> 00:34:37,180 I'm channeling my inner Bernie Bro here, 598 00:34:37,204 --> 00:34:39,367 but I think a lot of people would be skeptical 599 00:34:39,391 --> 00:34:43,091 that we should trust companies to do better at this point. 600 00:34:43,115 --> 00:34:47,242 Should the government step in to raise minimum wages, 601 00:34:47,266 --> 00:34:50,501 do other things to protect workers in a more structured way? 602 00:34:52,001 --> 00:34:56,394 DS: Look, I think the government clearly has a role to play, 603 00:34:56,418 --> 00:35:01,412 and I think the private and public sectors 604 00:35:01,436 --> 00:35:04,413 need to work closer together 605 00:35:04,437 --> 00:35:08,865 to address so many of the issues 606 00:35:08,889 --> 00:35:13,902 that we face in our societies across the world, 607 00:35:13,926 --> 00:35:17,234 whether that be income inequality, 608 00:35:17,258 --> 00:35:20,498 environmental issues, 609 00:35:20,522 --> 00:35:22,182 health, 610 00:35:22,206 --> 00:35:23,993 protections, that kind of thing, 611 00:35:24,017 --> 00:35:25,852 privacy. 612 00:35:26,504 --> 00:35:31,976 But the way that I think about this is, 613 00:35:32,000 --> 00:35:35,080 it's very difficult for governments to regulate around this, 614 00:35:35,104 --> 00:35:38,765 because there are so many different ways of thinking about it. 615 00:35:39,775 --> 00:35:43,212 If I were another CEO, 616 00:35:43,236 --> 00:35:44,634 and this is like, 617 00:35:44,658 --> 00:35:48,342 it's actually in your best interest 618 00:35:48,366 --> 00:35:50,241 to go and do this 619 00:35:50,265 --> 00:35:53,099 because it's a competitive advantage. 620 00:35:53,123 --> 00:35:56,744 Like, we attract, I think, 621 00:35:56,768 --> 00:36:00,507 some of the best talent in the world 622 00:36:00,531 --> 00:36:02,410 to PayPal, 623 00:36:02,434 --> 00:36:05,329 because we have a mission that people believe in, 624 00:36:05,353 --> 00:36:08,701 that we actually are trying to make some sort of positive difference. 625 00:36:08,725 --> 00:36:11,637 I'm not saying we're the be-all and end-all, 626 00:36:11,661 --> 00:36:14,796 but I don't think people should shirk their responsibilities 627 00:36:14,820 --> 00:36:17,676 of at least making a small difference 628 00:36:17,700 --> 00:36:19,145 going forward. 629 00:36:19,169 --> 00:36:22,244 If enough companies did that, if enough governments did that, 630 00:36:22,268 --> 00:36:24,391 it would make a real difference 631 00:36:24,415 --> 00:36:25,849 in the world. 632 00:36:25,873 --> 00:36:27,439 And then the second thing is, 633 00:36:27,463 --> 00:36:29,852 you have to have values that support that. 634 00:36:29,876 --> 00:36:31,978 And those values are incredibly important. 635 00:36:32,002 --> 00:36:34,900 Those values should be all about inclusion. 636 00:36:34,924 --> 00:36:38,371 They should be about having a diverse workforce. 637 00:36:38,395 --> 00:36:41,650 They should be about financial wellness. 638 00:36:41,674 --> 00:36:43,606 And when you do that, 639 00:36:43,630 --> 00:36:46,256 and you attract the very best talent, 640 00:36:46,280 --> 00:36:48,526 then by definition, 641 00:36:48,550 --> 00:36:54,043 I think the single biggest competitive advantage for any company 642 00:36:54,067 --> 00:36:55,912 is their workforce. 643 00:36:55,936 --> 00:36:59,083 Strategies are great. 644 00:36:59,107 --> 00:37:00,845 A whole number of things are great. 645 00:37:00,869 --> 00:37:02,936 You have a great workforce 646 00:37:02,960 --> 00:37:04,988 that's passionate about what they're doing 647 00:37:05,012 --> 00:37:06,610 and is financially secure, 648 00:37:06,634 --> 00:37:09,034 and they will do amazing things. 649 00:37:09,058 --> 00:37:12,439 And I think it's that kind of competitive advantage 650 00:37:12,463 --> 00:37:14,388 that will spur companies. 651 00:37:14,412 --> 00:37:16,590 So there needs to be 652 00:37:18,060 --> 00:37:23,145 a set of CEOs and companies 653 00:37:23,169 --> 00:37:25,096 that start to move in this direction, 654 00:37:25,120 --> 00:37:29,885 and I believe you're beginning to see more do this. 655 00:37:29,909 --> 00:37:31,415 And once that happens, 656 00:37:31,439 --> 00:37:33,320 it starts to tip everything, 657 00:37:33,344 --> 00:37:36,753 and I think more and more need to do it 658 00:37:36,777 --> 00:37:39,942 to maintain their competitive positioning. 659 00:37:39,966 --> 00:37:44,428 And that may seem like a self-serving way why people are doing it, 660 00:37:44,452 --> 00:37:45,936 but honestly, 661 00:37:45,960 --> 00:37:49,460 I don't care whether they're doing it out of the goodness of their heart 662 00:37:49,484 --> 00:37:52,926 or they're doing it because it's competitively a disadvantage 663 00:37:52,950 --> 00:37:54,315 if they don't. 664 00:37:54,339 --> 00:37:59,061 Creating financial health for our employees is the goal, 665 00:37:59,085 --> 00:38:00,720 and we've got to get that done. 666 00:38:02,839 --> 00:38:08,066 CH: Yeah. I mean, it sounds like you think of this as a win-win, 667 00:38:08,090 --> 00:38:13,690 but it also sounds like you're willing to maybe think about your employees first 668 00:38:13,714 --> 00:38:16,983 and sell it to your shareholders later. 669 00:38:17,007 --> 00:38:20,270 Whitney is -- oh sorry, go ahead. 670 00:38:20,294 --> 00:38:22,334 DS: No, no, no -- I was just going to say, 671 00:38:22,358 --> 00:38:24,207 I actually do believe that, 672 00:38:24,231 --> 00:38:31,217 and I think the idea of a multistakeholder capitalism, 673 00:38:31,241 --> 00:38:33,752 that is a time for today, 674 00:38:33,776 --> 00:38:39,529 and we cannot just think 675 00:38:39,553 --> 00:38:42,926 that we have one stakeholder that we need to satisfy. 676 00:38:42,950 --> 00:38:48,646 We live in our communities, we live in this world. 677 00:38:48,670 --> 00:38:51,907 To have people struggling day in and day out 678 00:38:51,931 --> 00:38:56,272 is not good for any company, and ... 679 00:38:56,296 --> 00:38:58,069 We can only do x amount, 680 00:38:58,093 --> 00:39:02,833 but we can actually create financial health for our employees, 681 00:39:02,857 --> 00:39:04,063 and we should. 682 00:39:05,987 --> 00:39:09,323 WPR: Great. So we have so many questions coming in from the community. 683 00:39:09,347 --> 00:39:11,691 One here is from Lara Pearson, 684 00:39:11,715 --> 00:39:15,167 basically about whether PayPal would consider become a B Corporation. 685 00:39:15,191 --> 00:39:17,243 "Are you familiar with the B Corp movement, 686 00:39:17,267 --> 00:39:20,861 environmentally and socially responsible, multiple-bottom-line for profits? 687 00:39:20,885 --> 00:39:23,571 Presuming so, has PayPal considered or would it consider 688 00:39:23,595 --> 00:39:25,467 becoming a certified B Corporation?" 689 00:39:26,073 --> 00:39:29,433 DS: Yep. I'm familiar with B Corp. 690 00:39:29,457 --> 00:39:32,491 We have no intention to move 691 00:39:32,515 --> 00:39:35,695 to becoming a B Corporation. 692 00:39:35,719 --> 00:39:41,464 I think the values and what we are trying to do 693 00:39:41,488 --> 00:39:46,812 are very aligned with assuring a multistakeholder point of view, 694 00:39:46,836 --> 00:39:49,534 but what I really want 695 00:39:49,558 --> 00:39:51,344 is for this to be a movement 696 00:39:51,368 --> 00:39:58,282 across major corporations across the world. 697 00:39:58,306 --> 00:40:01,421 And you're not going to have major corporations around the world 698 00:40:01,445 --> 00:40:03,258 moving into B Corp. 699 00:40:03,282 --> 00:40:09,824 There's a lot of other side issues involved 700 00:40:09,848 --> 00:40:11,561 with being a B Corporation 701 00:40:11,585 --> 00:40:16,088 as opposed to just a publicly listed company, 702 00:40:16,112 --> 00:40:21,074 and so that's going to be a long way before that happens. 703 00:40:21,098 --> 00:40:24,455 And so what I'm really trying to do is 704 00:40:24,479 --> 00:40:29,842 encourage and demonstrate 705 00:40:29,866 --> 00:40:32,547 that being multistakeholder, 706 00:40:32,571 --> 00:40:34,650 that putting employees first, 707 00:40:34,674 --> 00:40:37,165 creates competitive advantage. 708 00:40:37,189 --> 00:40:44,108 And I think I'm not the only CEO who's feeling that, by the way. 709 00:40:44,132 --> 00:40:47,688 I think people like Satya Nadella from Microsoft are doing a great job, 710 00:40:47,712 --> 00:40:52,741 Marc Benioff from Salesforce. 711 00:40:52,765 --> 00:40:56,115 I could go through quite a list of names. 712 00:40:56,139 --> 00:40:58,752 But the list is not long enough yet, 713 00:40:58,776 --> 00:41:04,190 but I think there's some quite important names 714 00:41:04,214 --> 00:41:05,781 and individuals around the world 715 00:41:05,805 --> 00:41:12,418 who are now talking about multistakeholder capitalism, 716 00:41:12,442 --> 00:41:16,914 and I think that's an important element as we think about our economies 717 00:41:16,938 --> 00:41:20,742 and way of life looking forward. 718 00:41:22,780 --> 00:41:27,208 WPR: And there was so much interest also in your net disposable income program 719 00:41:27,232 --> 00:41:28,964 and a lot of questions around that, 720 00:41:28,988 --> 00:41:32,562 and one which I think is along these same lines from Juan Enriquez 721 00:41:32,586 --> 00:41:35,968 asking about a rational way to address extreme income disparities. 722 00:41:35,992 --> 00:41:38,885 And perhaps you could expand beyond this program, 723 00:41:38,909 --> 00:41:41,552 just sort of ways that we might think about this 724 00:41:41,576 --> 00:41:44,223 in a smarter way moving forward. 725 00:41:45,386 --> 00:41:48,374 DS: Yeah. 726 00:41:50,052 --> 00:41:56,876 Well, there's no easy solution, or it would have been done. 727 00:41:56,900 --> 00:42:00,098 So I think there are a couple things that I think about 728 00:42:00,122 --> 00:42:04,124 that may not fully address extreme income disparities. 729 00:42:04,148 --> 00:42:11,011 Again, I try to think pragmatically about these things, 730 00:42:11,035 --> 00:42:14,890 and, like, what can we really do to start to address this? 731 00:42:14,914 --> 00:42:16,602 And again, I think about, 732 00:42:16,626 --> 00:42:19,648 if we could take one step and then another step, 733 00:42:19,672 --> 00:42:22,757 then you're starting your journey, 734 00:42:22,781 --> 00:42:29,177 and without getting overwhelmed by how far away the end state is. 735 00:42:29,201 --> 00:42:32,990 So one, I think companies need to take care of their employees, 736 00:42:33,014 --> 00:42:35,755 and I think that will immediately help to address 737 00:42:35,779 --> 00:42:38,139 some of these income disparities. 738 00:42:38,163 --> 00:42:42,763 Number two, I do think that, 739 00:42:42,787 --> 00:42:49,771 ironically, if you have less money, 740 00:42:49,795 --> 00:42:53,763 it costs you more to manage and move it, 741 00:42:53,787 --> 00:42:57,249 which, think about that: 742 00:42:57,273 --> 00:43:00,358 the less money you have, if you're outside the financial system, 743 00:43:00,382 --> 00:43:04,164 the more you spend to manage and move your money. 744 00:43:04,188 --> 00:43:10,323 And I think that technology 745 00:43:10,347 --> 00:43:14,009 is at least a foundational way for us to think about 746 00:43:14,033 --> 00:43:19,927 how do we cut the basic costs of managing and moving money 747 00:43:19,951 --> 00:43:21,696 by 50 to 70 percent, 748 00:43:21,720 --> 00:43:23,743 like [check-cashing], 749 00:43:23,767 --> 00:43:25,459 sending remittances, 750 00:43:25,483 --> 00:43:31,260 which are such a huge, important part of the world's economy. 751 00:43:31,284 --> 00:43:33,908 You know, you do it a traditional way, 752 00:43:33,932 --> 00:43:36,439 you go into a store 753 00:43:36,463 --> 00:43:40,034 and send the remittance to another store and somebody goes and picks it up. 754 00:43:40,058 --> 00:43:42,375 First of all, incredibly time-consuming, 755 00:43:42,399 --> 00:43:45,450 and it can cost between eight and 12 percent 756 00:43:45,474 --> 00:43:48,224 of that remittance amount that you're sending. 757 00:43:48,248 --> 00:43:50,334 So if you're sending a hundred dollars, 758 00:43:50,358 --> 00:43:53,601 the recipient who so desperately needs it 759 00:43:53,625 --> 00:43:56,344 is getting 88 to 90 dollars. 760 00:43:56,368 --> 00:44:00,714 If you do that electronically, digital wallet to digital wallet, 761 00:44:00,738 --> 00:44:02,636 that can be like three percent, 762 00:44:02,660 --> 00:44:05,234 so you can get 97 dollars from that. 763 00:44:05,258 --> 00:44:11,742 And so I think there are ways of addressing the costs. 764 00:44:11,766 --> 00:44:13,026 As I mentioned, 765 00:44:13,050 --> 00:44:18,074 there is so much money spent on unnecessary fees 766 00:44:18,098 --> 00:44:19,654 and high interest rates, 767 00:44:19,678 --> 00:44:22,941 and if we can drop that by 20 percent, 30 percent, 768 00:44:22,965 --> 00:44:27,875 the amount of money we can return to vulnerable populations is quite large 769 00:44:27,899 --> 00:44:30,052 and will start to make a difference. 770 00:44:31,414 --> 00:44:32,574 WPR: That's great. 771 00:44:32,598 --> 00:44:34,699 We have a ton of questions from the audience, 772 00:44:34,723 --> 00:44:37,293 just one more before we turn things back over to Corey 773 00:44:37,317 --> 00:44:38,622 with her final questions. 774 00:44:38,646 --> 00:44:40,085 This one is from Anna Tunkel, 775 00:44:40,109 --> 00:44:44,297 which is just, I think, as we are rounding to the end of the interview here, 776 00:44:44,321 --> 00:44:46,887 "What are you most optimistic about, 777 00:44:46,911 --> 00:44:49,929 and what do you see as the biggest opportunities 778 00:44:49,953 --> 00:44:52,242 for 'Building Back Better' after COVID?" 779 00:44:54,282 --> 00:44:55,442 DS: Well, I mean, 780 00:44:55,466 --> 00:45:00,221 one thing I'm actually optimistic about -- 781 00:45:00,245 --> 00:45:05,880 and I've always been a believer in the human spirit 782 00:45:05,904 --> 00:45:12,011 and the power of an individual to make a difference. 783 00:45:12,965 --> 00:45:17,348 I know that sounds very cliché, but I truly believe it, 784 00:45:17,372 --> 00:45:19,734 and I think every one of us can make a difference. 785 00:45:19,758 --> 00:45:21,116 But here's what I'm seeing. 786 00:45:21,140 --> 00:45:25,232 I'm beginning to see that at a much larger scale 787 00:45:25,256 --> 00:45:26,836 than I've ever seen before. 788 00:45:26,860 --> 00:45:28,677 You know, we have different platforms, 789 00:45:28,701 --> 00:45:31,037 either the PayPal platform or the Venmo platform, 790 00:45:31,061 --> 00:45:34,769 Venmo here in the US, PayPal across the world. 791 00:45:34,793 --> 00:45:40,054 The amount of giving that's happening through those platforms, 792 00:45:40,078 --> 00:45:42,532 whether it be to local businesses, 793 00:45:42,556 --> 00:45:45,934 to artists, to musicians, 794 00:45:45,958 --> 00:45:47,807 to bartenders, 795 00:45:47,831 --> 00:45:51,417 to places of worship, to schools, 796 00:45:51,441 --> 00:45:54,405 to NGOs, to charities 797 00:45:54,429 --> 00:45:57,864 has exploded on the platform, exploded. 798 00:45:57,888 --> 00:46:02,745 We have helped to raise on the PayPal platform 799 00:46:02,769 --> 00:46:05,244 since COVID-19 struck 800 00:46:05,268 --> 00:46:10,542 2.8 billion dollars for NGOs and charities -- 801 00:46:10,566 --> 00:46:11,966 2.8 billion. 802 00:46:11,990 --> 00:46:14,137 That's incredible, 803 00:46:14,161 --> 00:46:17,515 the amount of generosity that is pouring out 804 00:46:17,539 --> 00:46:20,129 from the global community around this. 805 00:46:20,153 --> 00:46:26,502 And we're just seeing people randomly pay it forward. 806 00:46:26,526 --> 00:46:30,651 Somebody gives 20 dollars to a bartender, 807 00:46:30,675 --> 00:46:32,963 and that bartender takes 10 dollars of that 808 00:46:32,987 --> 00:46:34,619 and gives it to somebody else. 809 00:46:34,643 --> 00:46:38,687 And we're watching that over our platform, 810 00:46:38,711 --> 00:46:42,050 and that gives me a sense of optimism. 811 00:46:42,074 --> 00:46:47,082 I also feel like this period of time 812 00:46:47,106 --> 00:46:51,481 has exposed a number of things that were happening 813 00:46:51,505 --> 00:46:53,223 but were invisible, 814 00:46:53,247 --> 00:46:56,688 and I think when things become visible, 815 00:46:56,712 --> 00:46:59,239 that's when you can start to address them, 816 00:46:59,263 --> 00:47:01,781 and I think there's a lot of attention 817 00:47:01,805 --> 00:47:06,801 on some issues that should have had attention before, 818 00:47:06,825 --> 00:47:11,199 but vulnerable populations don't have as loud a voice as others, 819 00:47:11,223 --> 00:47:16,914 and now that voice is being heard, because you can't ignore it. 820 00:47:16,938 --> 00:47:21,889 And hopefully, that will create progress 821 00:47:21,913 --> 00:47:25,114 against some of these structural inequalities 822 00:47:25,138 --> 00:47:28,142 that have been there for a long time. 823 00:47:30,768 --> 00:47:32,571 WPR: That's wonderful. 824 00:47:32,595 --> 00:47:35,212 And there's so much interest online. 825 00:47:35,236 --> 00:47:39,599 You have some other questions to ask as well. 826 00:47:39,623 --> 00:47:42,475 CH: So I think we have one more from our community 827 00:47:42,499 --> 00:47:44,974 from Jacqueline Ashby. 828 00:47:44,998 --> 00:47:47,429 Anna sort of stole my last question, 829 00:47:47,453 --> 00:47:51,663 which was to restore our faith in humanity. 830 00:47:51,687 --> 00:47:54,181 But, there's so much interest coming in about NDI. 831 00:47:54,205 --> 00:47:56,572 Is there a way for people to learn more, 832 00:47:56,596 --> 00:47:59,803 for you to share your study and your methodology? 833 00:48:00,636 --> 00:48:02,121 DS: Happy to do so. 834 00:48:02,145 --> 00:48:04,663 There is nothing proprietary about it. 835 00:48:04,687 --> 00:48:08,866 We would love for this to be -- 836 00:48:08,890 --> 00:48:13,218 look, and this may not be the be-all and end-all measurement. 837 00:48:13,242 --> 00:48:15,931 It's the best one we could come up with, 838 00:48:15,955 --> 00:48:18,617 but if working within the community, 839 00:48:18,641 --> 00:48:23,770 we can evolve it and think about maybe things that it missed 840 00:48:23,794 --> 00:48:27,623 or maybe things that could be done better, 841 00:48:27,647 --> 00:48:28,826 that would be fantastic. 842 00:48:28,850 --> 00:48:31,829 I don't know the best way of doing that. 843 00:48:31,853 --> 00:48:36,610 I'll leave that to Corey and Whitney to help me think that through, 844 00:48:36,634 --> 00:48:38,912 but of course we'd be willing to share it. 845 00:48:38,936 --> 00:48:42,915 There is nothing about that that I don't want to share. 846 00:48:43,570 --> 00:48:45,725 CH: Sounds like a good TED Talk. 847 00:48:48,682 --> 00:48:53,090 Thank you so much, Dan. This has been a super-interesting conversation. 848 00:48:53,114 --> 00:48:56,045 I think we could talk for another hour, 849 00:48:56,069 --> 00:48:58,474 but thank you so much for being here. 850 00:48:59,444 --> 00:49:02,415 DS: Thank you, Corey. Thank you, Whitney. Thank you, everybody. 851 00:49:02,439 --> 00:49:04,046 WPR: Thank you, Dan. Thank you.