 Dan Chulman CEO of PayPal. Thanks for stopping by today. My pleasure. Thanks for having me. You guys I was looking over your Performers for the past year. It's been one heck of a ride I mean your stock is Apple formed Apple Facebook JP Morgan over the year to date. What is the market seeing in you guys? I think Digital payments is in its infancy right now, and I think what the market is looking for are pure plays in Kind of what is unfolding in the future and so PayPal that is our business digital payments We have a lot of scale. We're innovating now We're transforming the company and that's showing up in all of our metrics, and I think As we think about what it takes to continue to grow It's just that focus on customers and trying to be innovative and And a very large market that we're playing in take us through Venbo It may have been on a recent earnings call that it was called the crown jewel Of PayPal, but it feels though is there so much opportunity untapped opportunity. What is the status of Venbo right now? Yeah You know Venbo is one of One of our shining assets. We have a lot of great assets inside the company. We do have some 110 million people using our platform 17 million merchants on it But Venmo is beloved by the millennial generation It's become You know a verb So people ask For somebody to Venmo them money, but the secret to Venmo is it's not just a P2P service It's really the first social Network payment system so 90% plus of all payments Maybe I'll send you something then I'll tag it with either an emoji or a comment on it That gets posted to your feeds your friends see it they see what you're doing they can join you and so we're taking Venmo and Not just having it be a payment service But really be a part of your daily life and then we're adding more and more functionality to it So we're gonna start to monetize Venmo, but yeah by opening Up the entire PayPal merchant base in the United States to Venmo users So what we're trying to do is just add more and more value So you can shop at a PayPal merchant when you shop there that shopping Journey gets posted on your feed you can split What you bought with people people can see if you if you liked it so merchants Are really excited about getting into your social feed because there's nothing better than a friend Recommending something that they just bought so I think it'll be a real win for merchants a real win for Consumers and a win for our shareholders and a friend paying for your dinner. Yeah, exactly exactly Are we looking are you talking about ads eventually in Venmo? Is that one way to monetize it even more? so There is no shortage of people that would like to Advertise in the feeds that we have but I think for us we really want to be very careful. We have a Magic that's happening with Venmo right now and Any service that we add to Venmo were very careful about it. We want to keep That Value proposition that we have for that market and it's a particular market that we're serving very pure But we think we can add more and more services monetize it add more value Whether advertising is a part of that is questionable right now for me So you guys have just thought you've really led first move of a man advantage with Venmo How big a threat is you know, we've seen in recent weeks an Apple pay cash I mean this hits at some point. How are you thinking about that? There are a lot of different P2P services out there and there have been for a long time with a lot of leading players What differentiates? Venmo is One it's not just a P2P service. It actually is tied in to your entire social network. And so It is very viral and the larger Venmo gets The more attractive it is for other people to be a part of Venmo because there's a network effect Your friends are in it. If you're not in it, it's harder to send you money. And so I Think that there is a tremendous runway for Venmo. We've seen a lot of services come into the market and Venmo continues to exhibit Very strong growth. In fact, I think we've had something like 15 straight quarters where the volume growth on Venmo year over year has exceeded a hundred percent and so I think the value that we're going to add to Venmo is going to be More and more attractive to that millennial market and so we'll always compete against different competitors out there but I think the value that we have is differentiated and Increasingly differentiated as we look forward the way I'm taking that is almost It's gonna be hard For an apple or any other competitors to get into this market. I mean is that is that fair to say or make it strong inroads? You know, I never liked prognosticate about the future because I think a lot of people have been wrong when they've done that I Think our focus needs to be on the value proposition that we provide to certain segments of the market And if we can do that the way that we have been doing that with a real focus on what are the pain points what delights Customers in that particular segment as opposed to focusing on competitors and what they're trying to do I think we'll continue to be successful in that marketplace. What is your view of retail right now? I think PayPal I think retail I on one hand you have online growing so successfully a bricks-and-mortar Doing anything but that. How do you think about retail? Yeah? I think retail is at a very interesting tipping point in its history right now I think that mobile is gonna fundamentally redefine the value proposition That retailers offer to their consumers. It's gonna redefine how people discover how people purchase how people find out about Reorders and and post purchase sort of loyalty And I think that mobile is blurring the distinction between online and offline Previously to your point people would think about well offline is only growing X amount Online is growing very fast, but but it's a smaller part of retail I think mobile has basically broken apart that definition and commerce is just commerce right now It is clearly a cross-context where people will seamlessly shop between online and offline Locations and that's a great trend. That's actually moving in our direction all of that will be facilitated by digital payments and When it comes to mobile payments We clearly are the market leader in that our checkout conversion because of one touch and we can talk about that later is almost two times that of the rest of the industry and so That blurring between online and offline and that acceleration of digital payments into mobile payments Is a tailwind for us for sure speak of blurring. I mean people are buying things from Facebook Instagram, how's that changing? I know you've struck deals with some of the social media companies. Yeah over the last three years we've kind of fundamentally changed who we are as a company we're much more of a Platform company as opposed to a checkout product company We offer a suite of services both branded and unbranded and we offer full-choice To consumers right now as a result of that our ability now to partner a Across the industry whether it be with leading tech players like Facebook like Google like Microsoft like Baidu Alibaba Leading financial institutions JP Morgan Wells City Visa MasterCard We've done something like 20 deals over the last 18 months with major players because we are In open neutral third-party platform that clearly has the scale and the Value add that can add a tremendous amount to these partnerships And so as people tend to move more towards contextual commerce where Commerce moves to where people are instead of having people move to where the commerce is like Facebook Exactly right exactly right we are powering those processes and very Strategic partner with Facebook in allowing that type of commerce and that Connectivity between merchants and consumers to happen in the context of where they are the Baidu deal guys recently struck That's it was briefly touched upon a last earnings call But that's a might be a bigger deal than a lot people expect Yes so Baidu is Basically the search engine in China They have well over a hundred million people using their wallet right now It's not an exclusive deal with Baidu. We could do deals with other players In China as well. In fact, we have a pretty big deal with Ali as well But what we're doing with Baidu is we're enabling those consumers within China To seamlessly buy from our seventeen million merchants outside of China and really facilitate cross-border commerce and allow the Chinese consumers To tap into merchants around the world that's great for our merchants on our platform It opens up all the people Hundreds of millions of people that previously didn't have access to the merchants on our platform and now do And with Ali we've done almost the opposite We've taken merchants on Ali express and have opened up our approximately 200 million consumers who use our platform to be able to purchase a merchants inside of China and that's great economics first cross-border is kind of part of the DNA of PayPal because we guarantee all of those transactions and if you're a consumer Purchasing from a Chinese merchant. You may not know that merchant You may be a little bit insecure about that purchase, but we guarantee it same with the Chinese consumer purchasing from a merchant outside of China and so that really plays into our strengths and it's something I think we can help facilitate Switching gears a little bit you guys have a lot of cash on your balance. You have maybe more than seven billion cash in equivalents And no debt that you're looking for acquisitions both big and small. What does an acquisition look like for you guys? Yeah, where you interested? Yeah, so I think a couple of things on that one I think we're in very early innings of of digital commerce and digital payments and the explosion of of mobile Driving that as a result There are a tremendous number of things that we want to do. We've clearly moved Beyond being one product and into as I mentioned that suite of services on a platform and For consumers we want to help democratize financial services We want to take underserved segments of the market and provide them basic consumer financial Transactions that go beyond checkout and on merchants we want to really Give them capabilities and a full platform to take advantage of mobile so they can get closer to their customers And that's a whole suite of services. So when I think about the Expansiveness of the vision that we have We have two things we can do we can innovate Inside the company and we've spent a ton of time and effort to upgrade our platform And so we now do Like 30,000 software releases a quarter We are constantly innovating inside the company That is a radical difference from where we were before and where we are right now Those investments into our platform or service-oriented architecture Have really unleashed a tremendous amount of internal innovation and an energy That means that we have to do less acquisitions than we had to do before But we're always scanning around the world and around the market to see if there is an acquisition Either big or small that can accelerate our efforts beyond our internal Do you want to leverage up the balance should do something big is that when you say big? Is that something that you would want to do it depends really on what we're looking at we have no plans To go and do that right now, but there are assets available around the world that range from under a hundred million to a couple billion and We look at all of them. We look at hundreds of assets I always say though in many times the best deal you do is the deal you didn't do Because we're pretty disciplined in how we look at that and we're doing a lot more innovation Internally, but that as you've seen whether it be with to or Swift to recent acquisitions We did will be an acquisitive company going forward because we think there's a ton of Opportunity for us to help consolidate the industry and leverage our platform in our scale to provide more services You are I mean you're a tech veteran. I'm not calling you a holder anything like that But you've seen pretty much anything you've brought companies public you've been around the block How would you set up a board right now? I've got to start a company from scratch We've had the issues with with uber Equifax in the news recently. Well, how should a tech company or startup approach? Setting up a good corporate board. I Think the first thing every company needs to do is establish sort of their mission and their vision And that's not fluffy that that's actually incredibly important You need to know where you're going as a company then your strategy starts to fill in that pathway there And then you have a tactical plan that basically is cutting You know that that trail that you've marked out, but you need to know where you're going The reason I say that within context of a board is that if you have an expansive mission and for us It's to democratize financial services so that Managing and moving money is a right for all citizens. Not just a privilege for the affluent. That means we are serving a very diverse population Within the market and as a result our board needs to reflect that reality We can't say that we're we stand for something if we don't act upon the that mission and the values that are Driven from that mission and that vision our values are About inclusion we stand up for them quite a bit. You've seen me in the public arena stand up for that Because I don't think that values can be something that you have on your wall That people look at and think are very pretty but you have to act on them Then they really are your values then they are part of the culture and when you have values that you're living you have employees that are very attracted to that company because you're trying to make a difference in the world and Will walk through walls? To get things done the board needs to have a reflection of that. I think boards Are the primary governance structure of a company You know I'm the chairman of the board of Symantec So I have a lot of outside board experience as well. I've seen it both from a board perspective and from a management perspective and both have a very very important role to play in good governance of Corporations could this culture that we keep reading about in Silicon Valley. Can this be fixed? What needs to get done to get at the root of this news that would this issue? I absolutely believe that companies have a Obligation maybe even a moral obligation to be a force for good. That means you have to act on it Though you can't talk about it and not act upon it. I don't think in our society. We can leave all of the problems that are out there to government or non-profits Or to people who study it in academia. I think it needs to be a combination of all of us coming together And for instance, there are some issues that really PayPal can't can't solve It's not our expertise But things like financial inclusion which are incredibly important the financial health of underserved populations Can be if we can drive financial health there and help improve Economies just a little bit that can make a gigantic difference in the world and so I think Technology can play a great role in being an inclusive force. I think it has to do that Going forward it cannot drive further divides We have enough of that in our world and in our country and technology can be a force that Helps But you need to have very clear leadership in companies. You need to have companies that whose brands Stand for something That is inspiring because employees want that and by the way, I always feel if you have employees that believe You get the best employees and the best employees serve customers incredibly well and if customers are served incredibly well shareholders are served well and that's the power of Doing well in the market by doing right for consumers Before I let you go take us through your work at wrap workout regimen. I've heard stories about it But I'll leave it all floors all yours Oh Thanks for that. I know you do a workout. I'll leave them on if I didn't exactly. I think most People try to live a relatively balanced life. I think that's very important and for me Martial arts has been a part of my life for a long time But what I love about martial arts is not just the physical part of it. There's a Philosophy that comes out of that that enables you to think about the situations that you face in a very clear way a lot of people tend to React either fight or or flight But in many ways, you just want to take a step back You want to understand the situation you want to approach it in a cool common collected way and I feel like Working out allows me to think about The way I want our company to work going forward the way we think about competition the way we serve customers and that Mind and body bounce. I think is very important in leadership in general. Have you implemented this in your office? Do your top executives follow you in this? How do they you know for me? Somebody wellness is one of our core values as a company But I think everybody has to find their own way in that if dance might be something spin might be it Martial arts could be it There are any one of a number of ways that people achieve bounce In their lives and I don't like to dictate that. I think that's a personal choice well, thank you for taking the time to appreciate and Definitely probably kick my butt just saying Thank you so much. All right. Thanks. Thank you. Yeah, appreciate it