PayPal’s Rainey: CFOs Must Focus On Customers (Not Just Cash Flow) Amid Great Digital Shift

Amid the myriad challenges of 2020 — the pandemic, the wildfires, the hurricanes, the social unrest — the silver lining might be that firms of all sizes have learned to pivot, to serve their end customers in nimble ways.

In an interview with Karen Webster, John Rainey, chief financial officer and executive vice president of global customer operations at PayPal, noted that CFOs (including himself) have learned to pivot, too, with ground-level, tech-driven insights that move well beyond simply tracking money flows.

To do so they must take the long-term view while being mindful of the intersection and interdependencies between finance, operations and the customer experience — along the way finding new methods to measure and address pain points.

“CFOs get typecast more than other executives as being just debit- and credit-oriented,” Rainey told Webster. “That may have been true some period of time ago; I think it’s very different today.”

He said long-term strategies pay off over short-term fixes.

“The most successful CFOs have to have a strong understanding of the business,” he said. “They really understand that sometimes you’ve got to make decisions that may not be immediately beneficial in the short term, but are better in the long term.”

Keeping track of it all can be a challenge, said Rainey, who noted that PayPal and others are moving and adapting to external pressures at a dizzying pace.

He offered an example of nimbleness: Months before the pandemic hit, PayPal was about to pilot a work-from-home program for its thousands of customer service operations employees, with an eye toward flexible scheduling. It was an effort that Rainey said was “slowly being explored … and then within a 10-day period [amid the pandemic], we basically said, ‘OK, let’s do this. Everybody’s got to work from home.’”

Another example: This past spring, PayPal pivoted to facilitate small- to medium-sized business (SMB) loans through the Paycheck Protection Program. “Within a seven- to eight-day period, we were able to extend loans to merchants,” through the PPP, said Rainey. “And if you talk to our product and technology people, they will tell you that under ‘normal circumstances’ that would have taken months.”

Of course, the initial triaging of work-from-home and other digital efforts now feel like ancient history. Businesses and consumers are digging in for the long haul in a pandemic.

Now there’s no telling when we’ll see the other side of the coronavirus.

But some of the trends are inexorable, said Rainey. The shift to digital is backed up by PYMNTS’ research that shows consumers are likely to conduct a significant (and even growing) amount of business, from shopping to ordering from restaurants online until a vaccine is on offer, and likely even after that.

Second quarter earnings results for PayPal were the best in the company’s history.

“The uplift that we saw, and the trends around eCommerce are staying high … it just shows that people are moving to the online world,” he said, even for people who had not embraced eCommerce much if at all.

(And you might be surprised to find that at least some people have been slow to jump to eCommerce. In one example, Namogoo estimated that 14 percent of consumers surveyed had tried online shopping for the first time amid the pandemic.)

But beneath the shifts, fine-tuning is necessary — and requires a holistic view of all the far-flung, moving parts of an enterprise, large or small.

CFOs, said Rainey, can manage profit and losses, but also can examine operations and customer service efforts in real time, making adjustments where necessary — in ways nimbler than if departments were being run separately by different people.

He recounted that he has visited PayPal customer service operations and listened in on calls, gaining insight into pain points that need to be addressed — such as cutting down on inefficiencies. Years ago, he noted, wait times on hold might, in isolated cases, stretched out over hours because some callers would phone call centers at closing time, would be routed to a different queue and be left on hold simply because no one was around to take the call.

That pain point was uncovered through data analytics and addressed swiftly without the need for additional PayPal resources, with a 90 percent reduction in long wait times on the phone.

“In the prioritization of all of our major project initiatives,” he told Webster of current efforts, “having that perspective of the customer really helps me with what I think contributes to our long-term success. At the same time, bringing an analytical mindset to customer service has been helpful.”

What’s Important To Merchants

Similarly, he said customer operations (and robust data analytics) help pinpoint exactly what is important to merchants. And what’s important to merchants right now is changing. In the earlier days of the pandemic, CFOs and business owners may have been worried about, say, financial projections; now they are focusing on “return to work” plans.

“If you’re a brick-and-mortar business, you’re thinking about, ‘If the pandemic is here for who knows how long, how can I establish an eCommerce business or a buy online, pickup in-store?’” said Rainey.

The restaurant that may be operating at 50 percent capacity upon reopening in a few weeks will not find that activity enough to return to pre-pandemic levels. But it may thrive if, for example, it pivots to bring food trucks to its customer base.

Those concerns are top of mind for smaller firm seeking to spur top lines, where pivoting requires capital (here, of course, the province of the CFO) and where Rainey said SMBs are an underserved market, aided by offering such as PayPal Working Capital.

The pressures dragging down SMB formation can also be alleviated a bit, he said, by payments firms working with regulators to get on the same page about taxation and other issues related to access to capital.

“I think sometimes there’s this notion that what we want and what regulators want are different things. They’re not,” said Rainey.

As the coronavirus changes the way business is done, CFOs are also, in some cases, taking on new roles — perhaps mulling ways to improve the financial wellness of employees or giving back to their respective communities. They also need to continuously monitor the ways technology is impacting various verticals.

“Most of the time when we see technology trends that influence us, they take years to occur,” he told Webster. “Blockbuster is a great example. They didn’t evolve, and we saw what happened.”

Of the great digital shift, he said, “this technology trend is happening at warp speed, and for CFOs, it really places an emphasis on fast execution.”