PayPal CEO on earnings, online spending trends during pandemic and more

🎥 May 04, 2020 📺 CNBC Television ⏱ 8m 👁 8926 views

PayPal reported a record amount of new active accounts added to its platform in April, but it saw a drop in quarterly profit as the Covid-19 pandemic weighs on consumer spending. PayPal President and CEO Dan Schulman, joins "Squawk Box" to discuss. For more coronavirus live updates: https://www.cnbc.com/2020/05/04/coron... For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2JdMwO7 » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCcla...

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About Daniel Schulman

Dan Schulman, who became CEO of Verizon in late 2025 after a stint as Vice Chairman and Managing Partner at Valor Capital Group, has been discussing the company's turnaround strategy and the rapid evolution of artificial intelligence. He stated that Verizon had lost market share for five consecutive years and that its market capitalization had fallen from first to last in the industry. Schulman described implementing a major restructuring that included laying off approximately 13,000 employees, which he said was necessary to generate cost savings for reinvestment in customer service and infrastructure. He characterized the company's new posture as "playing to win" rather than being a "punching bag." Schulman has made several predictions about technological timelines, stating that he believes artificial general intelligence (AGI) will arrive within two to four years, quantum computing by 2028, and humanoid robotics shortly after. He described current AI models as "the worst models that we will ever have in our lifetime" and said the pace of technological change is faster than any he has previously observed. Schulman acknowledged that AI will likely lead to job displacement and said Verizon is allocating $20 million toward employee reskilling, while also calling for collaboration between private and public sectors to address workforce disruption. He noted that Verizon is using AI tools, including a model called Mythos, for cybersecurity and network management, and that the company is experimenting with AI agents for customer service.

Source: AI-verified profile updated from Daniel Schulman's recent appearances. Browse all interviews →

Transcript (8 segments)

✨ AI-enhanced transcript with speaker attribution

Reporter0:00

PayPal stock trading at all-time highs amid this pandemic. The company says it added more than seven million net new customers just in April. Profit dropped sharply in the first quarter, but PayPal says that it expects a very big recovery in payment volumes in Q2. And joining us right now is PayPal's president and CEO, Dan Shulman. Dan, it's great to see you. It's hard to say congratulations on a great quarter during what has been such a difficult time for so many, but yours is one of the companies that has not only managed the challenge but has become a beneficiary of all of this. I think the big question on the minds of investors and frankly those just trying to understand what's taking place in the world of e-commerce and transactions is: how much of this do you think is specific to this particular moment, being shuttered inside people using Venmo, using your service, and what happens in a world where people hopefully go back to some semblance of normal?

Daniel Schulman0:58

Yeah, first of all, Andrew, thanks for having me on the show, and Becky and Joe, good to be with both of you as well. As you mentioned, we did have a very strong April, maybe the strongest month that we've had since we've gone public. We had a record number of customers come on to the platform, record engagement, we hit our all-time highest number of transactions in our history on May 1st, higher than Black Friday, higher than Cyber Monday of last year, and revenues jumped up to about 20% in April. I think this is obviously happening because there is an acceleration across all of our lives from physical to digital. I think you're seeing digital payments in this crisis move from being a nice-to-have capability to a must-have essential service. And I think your point is a really good one: all of us hope that we can move through this crisis as rapidly as possible, but it is certainly going to change the way we live our lives going forward. We are all going to be very cognizant of hygiene, of health issues, of social distancing. So I think we're at a tipping point in e-commerce. I think we've accelerated where we were going to be maybe three to five years, and in months have jumped ahead, and I don't think there's any turning back from that.

Reporter2:42

Well, let me ask you about that in terms of that acceleration. When we do go back to some semblance of normal, walking into a store, going to a restaurant, what have you, typically I still pull out my credit card. And in a world where nobody is going to want to touch the keypad or touch that pen or sign the receipt, how do you imagine PayPal navigates that? And what's the benefit? I imagine we're going to be using our phones in a much more significant way, even in the real-life settings if you will.

Daniel Schulman3:14

Yeah, no, I think that's a great point. I completely agree with you. I think you're going to see digital payments in what we call omni-channels, which basically means you're going to see it in the real world in-store through contactless payments, as well as online. You're going to see a lot more people ordering online and maybe picking up in-store and either flashing a QR code or tapping their phone. But there's a recent survey that just came out that said 60% of individuals don't want to handle cash going forward, they don't want to touch a keypad of some sort. So I think the advent of digital payments in-store is clearly coming, and we are going to accelerate our efforts in-store as a result of this. I have a huge team working on that right now because I just think we are all going to see the hastening of the demise of cash. There's still over 18 trillion dollars in cash transactions that happened last year, and I think a lot of that is going to move towards digital.

Reporter4:38

Becky, you shocked me one time when you told me the number of cyber attacks that you were dealing with every day, every hour, probably every minute. What's that number look like now? What are we talking about?

Daniel Schulman4:51

You know, I think in any crisis, you see a number of different things that happen. You see companies, governments, nonprofits, NGOs step up and do things that are maybe more magnanimous than they've done before and really take their degree of responsibility up. At the same time, you always see bad actors who try and take advantage of crises. The great thing is that we've been preparing for this. Transactions have gone up, but we're seeing our fraud and loss rates actually go down. That's because we have more data and information than ever before, very sophisticated algorithms that don't just prevent bad actors from coming in. Because people are stealing IDs, a consumer loses their personal identification on average once every two seconds. So we have to be sophisticated enough that when somebody comes in with stolen credentials, we stop them from moving money out. That's the kind of process we have: we look at 30 to 100 different variables on every transaction in real time to be assured that it's actually you doing that transaction, and we're having very good success on that. The financial system in general is built to assure that fraud and bad actors have a hard time coming into the system, but again, we have to keep on our game. We always have to stay ahead of this, and it is a constant battle to be sure that good transactions can go through while you block bad transactions.

Reporter6:59

Hey, hey Dan, real quick. We've talked about employees a lot over the years with you, and ESG and good practices. You said that you won't lay anybody off. I'm curious how you think about furloughs, when you think they're appropriate, when they're not. Their company's clearly in dire straits, either headed towards bankruptcy, who clearly need to do it, and other companies that may be pursuing it just to try to maintain the kind of profitability that they had pre-crisis. What's appropriate?

Daniel Schulman7:28

Yeah, listen, Andrew, I don't want to speak for other companies, but I do think this is a time where most of us, at least financially strong companies, need to step up for their employees. I'm a firm believer that if you put your employees first of all of your stakeholders, they really rise up to the occasion, they serve customers better than ever before, and if you serve your customers well, then obviously you serve your shareholders well. So I think anything we can do, and we made that commitment not to lay off any employees as a direct result of the pandemic, is the right thing.