What COVID-19 means for the future of commerce, capitalism and cash
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Not SyncedCorey Hajim: Today, our guest
is Dan Schulman, CEO of PayPal. -
Not SyncedWhen most of us think of PayPal,
we think of buying something online -
Not Syncedor paying a friend back
for a drink using Venmo. -
Not SyncedBut PayPal has also become
a major financial services player, -
Not Syncedoften acting as an alternative
to a traditional bank. -
Not SyncedDuring this pandemic,
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Not SyncedPayPal has supported small businesses
around the world by providing loans, -
Not Syncedwaiving fees,
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Not Syncedand increasing cashback programs.
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Not SyncedIt has also worked with the US Government
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Not Syncedon its Paycheck Protection Program,
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Not Syncedas well as distributing stimulus checks.
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Not SyncedIt has enabled an outpouring
of generosity online as well. -
Not SyncedThe trend towards digital payments,
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Not Syncedor what we might now want
to think of as contactless payments, -
Not Syncedhas massively accelerated,
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Not Syncedand it's changing forever
how we think about commerce. -
Not SyncedSo I'm really excited
to have Dan here with us. -
Not SyncedThank you so much, Dan.
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Not SyncedDan Schulman: Thanks for having me, Corey.
Pleasure to be here with you. -
Not SyncedCH: Glad to see you.
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Not SyncedSo let's dive right in.
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Not SyncedWithin a few months
of this pandemic's arrival, -
Not Syncedmore than 30 million people
have filed for unemployment -
Not Syncedin the United States alone.
-
Not SyncedThese are certainly unusual circumstances,
-
Not Syncedbut it seems clear we were running
very close to the edge, -
Not Syncedand now so many businesses
and their employees -
Not Syncedare facing huge financial challenges.
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Not SyncedHow worried are you?
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Not SyncedDS: Well, I think the crisis
has exposed three things. -
Not SyncedObviously, it's a health crisis
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Not Syncedfor so many people.
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Not SyncedSecond thing is that health crisis
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Not Syncedhas ricocheted,
-
Not Syncedand the world is now
in an economic crisis. -
Not SyncedAnd the third crisis
that we don't talk so much about, -
Not Syncedbut I think is impacting
-
Not Syncedthe way that we're going
to live our lives going forward, -
Not Syncedis this is a psychological crisis as well.
-
Not SyncedPeople are reexamining
their place in the world, -
Not Syncedwhat's happening in the world,
-
Not Syncedhow they're going to live their lives,
-
Not Syncedboth in the pandemic and post-pandemic,
-
Not Syncedand so I think this is something
that each of those phases -
Not Syncedwill need to be dealt with.
-
Not SyncedBut you said this,
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Not Syncedand I completely agree with you:
-
Not Syncedthere was an economic crisis happening
-
Not Syncedwell before the pandemic exposed it.
-
Not SyncedIt's kind of like
the water level came down -
Not Syncedand exposed what was already there.
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Not SyncedYou had, for instance, in the US,
-
Not Synced185 million adults in the US
-
Not Syncedstruggling to make ends meet
at the end of the month. -
Not SyncedYou have over 70 million adults that are
really outside of the financial system, -
Not Syncedspending over 140 billion dollars
on high interest rates, -
Not Syncedunnecessary fees, and struggling as well.
-
Not SyncedAnd so I think
what this has really done -- -
Not Syncedbecause you can't ignore 20,
25 percent unemployment rates -- -
Not Syncedit's exposed this crisis
-
Not Syncedand forced a lot of people
-
Not Syncedinto maybe actions
that they might not have taken -
Not Syncedwithout this crisis happening.
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Not SyncedCH: Yeah, I think that's right.
-
Not SyncedThere are so many challenges
and so many opportunities, -
Not Syncedand I think you've spoken
of this opportunity -
Not Syncedof digital transactions
being helpful to people, -
Not Syncedand obviously the trend, as you've said,
-
Not Syncedhas massive accelerated and pushed us
into this world even further. -
Not SyncedSo I'm curious,
-
Not Syncedwhat does the world
look like without cash? -
Not SyncedOr less cash?
-
Not SyncedWhat are the advantages
and what are the challenges -
Not Syncedof making that transition?
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Not SyncedDS: I think some of the trends
that are emerging -
Not Syncedcoming out of this pandemic
or coming into it and as we look forward -
Not Syncedis clearly this has been a discontinuous
change in the trendline, -
Not Syncedas we move from physical to digital.
-
Not SyncedI think we've accelerated
many forms of digital capabilities -
Not Syncedby three to five years.
-
Not SyncedAnd that can be from digital payments
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Not Syncedto telemedicine
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Not Syncedto really changing the face of retail
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Not Syncedand how we think about retail
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Not Syncedand changing the face of entertainment,
-
Not Syncedeven changing the way governments
think about managing and moving money -
Not Syncedand really thinking about
digital currencies going forward. -
Not SyncedAnd so I think there are
a tremendous number of changes -
Not Syncedthat will occur
-
Not Syncedduring this pandemic and coming out of it.
-
Not SyncedDigital payments is obviously
one of the big ones that will happen. -
Not SyncedI mean, cash has been around
for quite some time, -
Not Syncedthousands of years.
-
Not SyncedI would not be so bold
as to predict its full demise. -
Not SyncedMany people have been wrong doing that.
-
Not SyncedBut there is no question right now
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Not Syncedthat you will see an acceleration
of the demise of cash. -
Not SyncedLast year, you had
over 18 trillion dollars of cash -
Not Syncedspent at retail.
-
Not SyncedEighty-five percent
of the world's transactions today -
Not Syncedare done in cash still.
-
Not SyncedBut the really big change right now
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Not Syncedtowards digital payments,
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Not Syncedand that's both the advent
and the acceleration -
Not Syncedof commerce that's happening,
-
Not Syncedas well as the shift to in-store
contactless payments, as you said, -
Not Syncedand the real impetus for that
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Not Syncedis health reasons.
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Not SyncedPeople do not want to hand over money.
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Not SyncedThey do not want to touch screens.
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Not SyncedThey don't want to pick up a pen
and sign at the point of sale. -
Not SyncedAnd so there is a demand
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Not Syncedfor contactless payments
and digital payments -
Not Syncedto keep social distancing
requirements in place, -
Not Syncedto protect the health of cashiers,
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Not Syncedto protect the health of consumers.
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Not SyncedAnd I think we are going to see,
we are already seeing in our business, -
Not Synceda surge in digital payments
across the world. -
Not SyncedCH: It seems like a great opportunity,
-
Not Syncedbut how do we make sure
that this transition is inclusive? -
Not SyncedI mean, you've talked about
how so many people are underserved -
Not Syncedby the traditional banking industry.
-
Not SyncedHow do we make sure that those people
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Not Syncedhave that opportunity?
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Not SyncedAnd it feels like a smartphone
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Not Syncedbecomes an essential item.
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Not SyncedHow do we address that?
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Not SyncedDS: Yeah.
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Not SyncedI do think that a mobile
is really a key to unlocking this. -
Not SyncedI've often said that, really,
-
Not Syncedone of the big moon shots
for the financial services industry, -
Not Syncedis this idea of not just
financial inclusion. -
Not SyncedMost people define financial inclusion
by somebody having access to bank account, -
Not Syncedbut just having access to a bank account
is not nearly enough. -
Not SyncedI think what we need to aim for
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Not Syncedis how do we think about financial health?
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Not SyncedHow do we make sure
that people have the ability -
Not Syncedto have some wherewithal
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Not Syncedto create savings to withstand some kind
of financial shock to the system. -
Not SyncedI do think that mobile phones
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Not Syncedwill be the way that this occurs
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Not Syncedand will be very inclusive going forward.
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Not SyncedThere are going to be something like
six billion smartphones in the world -
Not Syncedover the next several years.
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Not SyncedThe cost of a smartphone is plummeting.
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Not SyncedI think in India now you can buy
a smartphone for under 25 dollars. -
Not SyncedSo you're going to have ubiquity
of smartphones across the world, -
Not Syncedand in fact what's very interesting
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Not Syncedis in lower income populations
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Not Syncedthere is a greater penetration
of smartphones than in higher income -
Not Syncedbecause the smartphone
is the only device that somebody has. -
Not SyncedHigher income individuals
may have desktops or iPads, -
Not Syncedthat kind of thing,
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Not Syncedbut lower income can afford one device,
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Not Syncedand they choose it to be a smartphone
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Not Syncedbecause they can get and live their life
through that one device. -
Not SyncedAnd think about that one device.
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Not SyncedReally you have all the power
of a bank branch -
Not Syncedin the palm of your hands,
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Not Syncedand when you can start
to create distribution of services, -
Not Syncedfinancial services,
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Not Syncedthrough a smartphone,
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Not Syncedyou then are able
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Not Syncedto manage and move money
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Not Syncedin ways that we couldn't do traditionally.
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Not SyncedIn the physical world,
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Not Syncedif you get a check,
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Not Syncedyou need to then go
to a cash checking place to cash it. -
Not SyncedYou stand in line for 30 minutes.
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Not SyncedThey then charge you anywhere
between two and five percent -
Not Syncedto just change the format of currency
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Not Syncedfrom a check to cash.
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Not SyncedAnd then you have cash
and you want to pay a bill. -
Not SyncedYou need to stand in line again
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Not Syncedat a bill pay,
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Not Syncedand then you have to pay maybe 10 dollars
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Not Syncedfor an individual bill as a fee.
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Not SyncedIf you do that via a smartphone,
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Not SyncedI believe that not only do you save
a tremendous amount of time, -
Not Syncedbecause if you're outside
the financial system, -
Not Syncedmanaging and moving money
is practically a part-time job -
Not Syncedto go and do that,
-
Not Syncedso not only do you save time
and return time to individuals, -
Not Syncedbut you can cut the cost of transactions
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Not Syncedby anywhere between 50 and 75 percent.
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Not SyncedAnd remember that $140 billion
number that I gave you? -
Not SyncedAnd that's just in the US.
-
Not SyncedImagine if you could cut that in half
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Not Syncedand return that to the populations,
the most vulnerable populations -
Not Syncedthat need it most.
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Not SyncedSo I think there's tremendous promise
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Not Syncedin the use of technology
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Not Syncedto help provide both inclusion,
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Not Syncedand make sure there aren't
digital haves and have-nots, -
Not Syncedbut also to start on this journey
towards financial health. -
Not SyncedCH: Yeah, I think a lot of people
don't realize that you don't need -
Not Synceda bank account or even a credit card
to open a PayPal account, -
Not Syncedwhich is super-interesting.
- Title:
- What COVID-19 means for the future of commerce, capitalism and cash
- Speaker:
- Dan Schulman, Corey Hajim, Whitney Pennington Rodgers
- Description:
-
- Video Language:
- English
- Team:
closed TED
- Project:
- TEDTalks
- Duration:
- 49:17
Show all
Retired user
Typo @30:54 you'll take of shareholders, inevitably. => It should be "you'll take _care_ of shareholders, inevitably."
Thanks in advance for the fix.
Nov 26, 2020, 5:57 PM-yulia
Camille Martínez
The English transcript has been updated on 11/30/20.
Please note the following edit:
30:54
you'll take of shareholders, inevitably ---> you'll take _care_ of shareholders, inevitably
Thank you, and thank you, Yulia!
Nov 30, 2020, 7:00 PMRetired user
Hi Camille, thanks a lot for the fix!
I might have found another one (moving forward very slowly :)) in 43:21 [check-cashing]
Dec 10, 2020, 5:54 PMI think DS does mean "cash checking", and should not be corrected. Cash checking means that you check the bank app on your phone to see how much money you have on your account.
Please double check, and if you agree, remove the speaker correction.
Take care,
Yulia