Schulman acknowledges the benefits of basic blockchain technologies, but does not think PayPal will invest some of its capital in cryptocurrency.
PayPal aims to create a super app and go beyond the usual buy, sell and store in cryptocurrency-related services. The CEO of the payment system Dan Shulman told about this in an interview for the Decrypt portal.
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In early February, PayPal announced the creation of a new division that will focus on the development of the cryptocurrency business. Shulman explained that the main goal of the new unit is to “create the next generation infrastructure”, as well as “increase the efficiency of digital currencies.”
Part of the PayPal technical team has been transferred to the unit, and is managed by an advisory board of “technology, cryptocurrency and regulatory experts.” According to the CEO of the payment system, they are already experimenting with smart contracts, and are also testing Ethereum and other blockchain networks to understand which platform is better to build infrastructure on.
Shulman said PayPal’s efforts, which currently boil down to offering Bitcoin and a range of other cryptocurrencies, will soon go far beyond buy, sell and store. However, he is disappointed that the “digitalization of the financial system” has not helped reduce costs for consumers: the average cost of accepting a transaction still remains at 2.8% of the payment amount.
“I really think that some of the underlying technologies associated with cryptocurrency – in fact, the technologies that central banks are paying attention to – can modernize the infrastructure of the financial system so that we live in a more inclusive society,” Schulman said.
However, Shulman does not believe PayPal will join companies that have recently invested some of their capital in Bitcoin. He explained that he doesn’t like the volatility of the cryptocurrency. In addition, PayPal wants to save money for potential acquisitions, including in the cryptocurrency sector.
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In mid-February, speaking to investors, Schulman said PayPal wants to consolidate its individual offerings into a cohesive ecosystem. As an example, he cited Chinese supers such as WeChat and Alipay. The superapp of the payment system can include a service for trading stocks, tools for working with high-yield savings accounts, paying bills and cashing checks.
Shulman told Decrypt that such ecosystems are now growing rapidly. He also noted that PayPal currently serves over 377 million digital wallets. The company is working to consolidate a wide range of payment instruments into one application. It is likely to include cryptocurrency services as well.