An Interview with John Rainey (CFO and EVP of Global Customer Operations at PayPal)
Business Today (Hannah Pouler): Could you explain for our readers what your role at PayPal entails? Since joining the company in 2015, how has that role evolved?
JR: After spending 18 years in the airline business, most recently as EVP and CFO at United Airlines, I joined PayPal in 2015 and currently serve as the Chief Financial Officer and Executive Vice President of Global Customer Operations. I joined at an exciting time as the company had just separated from eBay and my experience aligned with PayPal’s aspirations as a independent, publicly traded company.
When I arrived at the company, PayPal was misunderstood by the market. Many people still thought of us as just a way to pay on eBay. I made it one of my top priorities to go out to the investor community and explain the company’s value proposition and growth opportunity to our shareholders.
It is important that investors and analysts understand the strength of our business model, our strategic business plan and the numerous growth opportunities ahead. PayPal is working to become the world’s largest open digital payments platform serving both merchants and consumers. As money becomes digital and the world moves to mobile technology, we are benefiting from strong tailwinds. To capture this opportunity, we are focused on creating digital and mobile solutions that make moving and managing money more accessible and affordable for our more than 250 million active accounts around the globe.
In January, my role expanded to include leading PayPal’s Global Customer Operations, which includes PayPal's efforts to deliver on our promise of offering great services and experiences through our customer service centers around the world.
BT: There’s was a lot of chatter in the business world about PayPal’s separation from eBay in 2015. What was the motivation behind the split? And was it always part of the long-term business plan to move on?
JR: PayPal had grown beyond being only a way to pay on eBay. Our separation has enabled us to pursue and capture a huge addressable market by focusing on high growth parts of our business and having the ability to partner with many other merchants and marketplaces. In fact, since 2015, we’ve grown our business about 25% on average each year, in terms of the volume of our business, with eBay being only a fraction of that.
BT: For college students, Venmo has become one of the most viral apps of our generation. With this service, what is your target consumer profile, and does it differ from that of traditional PayPal users?
JR: Venmo has become the way millions of people in the U.S., particularly millennials, manage and move their money. A big driver of this engagement and what makes Venmo unique is the social aspect which resonates strongly with the millennial demographic and why many users check their Venmo social feed many times every day. Venmo users love the service so much, they also want to use it in many other ways, like shopping at their favorite stores, which we are beginning to enable. We’ve also recently issued a Venmo card to let people use Venmo offline.
Interestingly, Venmo’s growth has been the similarity to PayPal’s evolution over time. Twenty years ago, PayPal started as a way for people to send money to each other before evolving into a way to pay when shopping online, first with eBay and then with many other merchants.
BT: PayPal has recently acquired multiple companies, including Jetlore, HyperWallet, and iZettle. What was the strategy behind these acquisitions, and how do these diverse acquisitions fuel your long-term growth?
JR: As part of our growth strategy, we’ve been quite acquisitive this year. Specifically, the strategy behind our acquisitions of HyperWallet and Jetlore was to strengthen our value proposition for our merchant customers. Our mission is to help small and medium businesses grow and thrive in the global digital economy. Similarly, our $2.2 billion acquisition of Swedish startup iZettle significantly expands our ability to help these businesses accept payments in stores, as well as through online sites and mobile apps. Supporting businesses and helping them connect to hundreds of millions of customers around the world online, in apps and in their stores makes PayPal a powerful partner for businesses around the globe.
And let me spend a moment talking about that, because I think it’s very important in the understanding of PayPal. One of the things that makes us unique from other payment platforms is that we have a global two-sided network, with almost 20 million merchants accepting PayPal and more than 230 million consumers using PayPal. It’s one thing to have a network of merchants accepting payments, but if there are no consumers willing to pay that way, it’s a low value to those merchants. Businesses want to have shoppers coming to their websites, apps and stores. And the flipside of that is you can have hundreds of millions of consumers that have a way they like to pay but if it’s not accepted by merchants, it’s of little value. Being able to connect consumers to merchants and give them a trusted and convenient way to transact is very important and one of PayPal’s biggest differentiators.
BT: You’ve talked before about democratizing financial services worldwide. From the business side of things, what do you see as the benefit to reaching these potential consumers who don’t have access to a traditional bank account?
JR: Historically, it has been very expensive for traditional financial institutions to reach the financially underserved population. An extreme example would be the scenario of a global bank trying to justify the expenses associated with building a bank branch in a remote part of West Africa.
The fact remains there are roughly 2 billion financially underserved people in the world without many of the financial conveniences a lot of us take for granted, like a checking account, a savings account, or a credit card. However, 70% of this underserved population has a mobile device today, which enables us to put all the power of that hypothetical bank branch in the palm of their hands.
As a global, digital platform, while we can serve the underserved population at a fraction of the cost of banks, there’s a quality of life element here too. For example, we own a company called Xoom, that allows customers to send money internationally to loved ones or to friends, in a very seamless and frictionless way. The process of receiving money through a wire the old-fashioned way is a burden and sometimes you have to wait in line for hours to get access to that money. Through Xoom, we are putting the power into their mobile device, simplifying the process and allowing them to go shop with PayPal by having that mobile wallet.
BT: So do you think that companies like PayPal are doing more to potentially equalize a global economy than other, more traditional financial service companies?
JR: I think the opportunity is so great, that this is something that the financial services industry needs to work on together in a collaborative way. We are partnering with companies across our ecosystem to bring greater opportunities to our customers. We are effectively raising the quality of life of people all across the world, through enabling them to have access to digital money. While the examples I mentioned have been more focused on the consumer side, if you’re a small business owner, this is also a tremendous opportunity. One of the segments of our business is lending to small businesses and very often, if you are in one of these underserved areas, lacking access to capital is an impediment to growth. Therefore, we are enabling the opportunity for growth of small businesses in the U.S., the UK and Australia by enabling them access to capital digitally.
BT: You received a BBA and an MBA from Baylor University - how have your business degrees influenced your work and how you operate as an executive?
JR: It was a really pivotal moment for me and I can still remember taking my first finance class at Baylor and the realization that I knew that this was a career I wanted to embark on. I really liked the idea of doing analysis and understanding finance and how strong financial management can drive a business.
There are still things I learned at school that I apply every day at my job. I will also say that when I was in college, I had a notion that I would compartmentalize my life - my learning phase would be at college, then I would go on to my working phase. But what I’ve realized is that true learning never stops - it’s a process of continual improvement, and I’ve learned as much or more since college as I did at college. As I look at my peers and the people who work with me, it’s those who are continually striving to learn more, to get better, and who never really think that they have it all figured out - are the ones who stand out in my career as the very best people that I’ve worked with.
BT: Do you have any philosophies that guide you every day when you step into the office?
JR: In your professional career, you will always have impediments or things in your way. But having a can-do attitude is almost self-fulfilling. A positive attitude and a belief that you can figure out a way, is what I try to bring to work with me each day. I want to show up and give the very best version of myself and try to avoid falling into the trap of citing all the reasons that something will be difficult.
I have two kids, and I always tell my team a story from when they were growing up. If you’ve ever been around a toddler, you’ve probably heard them whine “I can’t” when they’re learning to do something. And I used to always tell my kids when they were younger, “the person who says I can and the person who says I can’t are both right. Which one are you?” That is the attitude I try to bring to work.