There are markets, and there are $100 trillion markets.
And might digital payments be in that $100 trillion classification?
In an interview with CNBC, PayPal CEO Dan Schulman estimated the market will come into that size, noting, “That’s sort of the market — total adjustable market — we’re playing into.” He said his firm may have as much as 1 percent to 2 percent of the market currently.
“We live in the space of digital commerce, and digital commerce is exploding still around the world,” he said. “There’s an explosion in digital commerce, and we’re riding that wave. What we see is pretty positive.”
He also said PayPal’s mobile payment service Venmo — still focused on its partnership model — and digital payment peers are unlikely to be negatively affected by weak holiday sales and a global macro-economic slowdown. As has been reported, the number of payments processed across Venmo grew by 80 percent year over year, and the CEO said PayPal may process in excess of $100 billion in transactions this year.
“P2P, or peer-to-peer payments, is exploding in the market. It’s a multi-hundred-billion-dollar marketplace. This will definitely not be a winner take all,” Schulman told CNBC. “I think the two will live side by side, and it won’t be a winner take all.”
In reference to Venmo’s continued push into new partnerships, he said, “people are thinking about how can they use technology” in service to end users. “I think it’s going to be less and less about how does one company hyper-serve customers. I think the new way of the world going forward is how do companies take the best of their platforms [and] put them together to better serve companies.”
Asia remains one of the fastest-growing regions for the company, said Schulman.
The interview touched on competition between Zelle and Venmo, and PayPal’s CEO said there are differences in how the platforms are used. He said the average Venmo transaction is about $50, and the average Venmo user transacts five times per week. In contrast, Zelle transactions occur about once a month, and the average transaction is $250.
Schulman said Venmo may not be profitable through at least the next two quarters, but the business is slated to be “very profitable … over the medium to long term.”